Simplified PAYE Deduction Scheme

I am employed as a domestic carer. My employer and I have heard that something has changed with regards to how domestic staff are taxed- can you tell me more please?  

1st April 2012

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.

By Jo Nockels

Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. 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 information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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