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The Simplified PAYE Deduction Scheme (SPDS) provides an alternative to standard PAYE for non-business employers being used by employers engaging domestic staff, and (often) elderly/disabled individuals engaging carers within their own home. It was intended to offer a simpler manual system. But now employer responsibilities under SPDS differ little to those of employers under standard PAYE so HM Revenue & Customs (HMRC) will be closing the scheme in two stages.

Stage 1 will inhibit entry to the scheme to any new employers from 6 April 2012, with all new employers going straight onto standard PAYE. Phase 2 will be the complete closure of the scheme on 5 April 2013 with all existing SPDS employers at that date being supported to move to standard PAYE and Real Time Information (RTI) reporting on 6 April 2013.

Assuming your employer is already operating a SPDS, they are not obliged to do anything until next April. But as suggested above, it is unlikely they will experience any major changes; since the standard PAYE scheme and SPDS have grown to be so similar over the years.

Last updated: 5th December 2012

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.


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