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HMRC consults on ‘PAYE pooling’ for employers

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HMRC is seeking views on a possible change to the PAYE system to allow closely connected employers to be treated as a single entity for PAYE purposes.

‘PAYE Pooling’ could save employers time and administration costs by reducing the number of separate returns and payments required, HMRC said.

‘In year’ leaver and starter information would not be required for movements of staff between employers in a pool, and the calculation of NICs on aggregated earnings would be simplified. However, pooling may take some employers’ PAYE payments above the limit for quarterly payments.

The idea was floated by the Labour government in the 2009 Pre Budget Report, but was ‘put on hold’ while HMRC developed the framework for Real Time Information.


ABC Ltd, ABC (Leeds) Ltd and ABC (Manchester) Ltd are three separate companies within the ABC Group. Each company employs a number of staff and, as separate employers, they each make payments and returns to HMRC under their respective PAYE references. With PAYE Pooling, a single PAYE reference could be set up for the ABC Group allowing the three employers to make combined payments and joint returns to HMRC.

Source: HMRC discussion document ‘PAYE Pooling’

Comments are invited by 15 December 2011. HMRC will consult further on any specific proposals for PAYE reform. If PAYE Pooling is taken forward, it will be developed ‘to fit with the RTI framework’.