HMRC to shut down unused PAYE schemes

HM Revenue and Customs (HMRC) has announced that unused pay-as-you-earn (PAYE) schemes will be shut down.

Employers that have not used their schemes will receive letters to explain that their PAYE schemes have been closed.

Any PAYE schemes opened after 5 April 2013 will be shut down automatically where the employer has not sent any PAYE returns or paid HMRC within four months of the scheme being set up. Schemes registered as annual schemes will not be closed by this process.

More than 1.69 million employer PAYE schemes, covering more than 46 million individual records, are already reporting in real time since the launch of new reporting requirements in April.

Ruth Owen, director general for personal tax at HMRC, said: “Closing schemes that are no longer needed is really important for businesses and for HMRC because it means that HMRC won’t waste employers’ or taxpayers’ time and money by needlessly pursuing returns or debts when, in fact, none are due.

“Since April, employers or agents (acting on behalf of their clients) which have set up PAYE schemes that are no longer needed can easily close the scheme by reporting this on their final submission. This new process helps further because it means we can identify and remove unnecessary schemes earlier.”