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to non-taxable status of the payment in the other country. It is therefore more likely that the Treasury had its eye on the £250 m it hoped to recoup. It is also likely that some of those high earning individuals will now rearrange their affairs so as to achieve non-resident status. |
Before 1974 earnings from foreign employments—a different concept altogether—were taxed on a remittance basis. This meant that tax would be paid in the UK only if the money was remitted to the UK. Moreover, at that time it was taxable only if the money was remitted in a tax year in which the foreign source existed.151 |
13A.4 PAYE152 |
13A.4.1 Introduction |
PAYE is the UK system of cumulative withholding of tax at source. It has become a mark of good manners to praise the UK’s PAYE system, but there is little cogent evidence to support such an assessment in unqualified form.153 While the system works well it is only as good as the quality of the information supplied. A withholding system, it has been said:154 |
“Combines the expedient and the objectionable. It is a rough and ready system which virtually garnishees taxpayers’ incomes, sometimes for debts they do not owe but subject in this event to refund. ¸ It is surprising that this withholding system, to which strong objections may be raised on grounds of principle, has aroused so little comment. It has probably done more to increase the tax collecting power of central governments than any other 1 tax measure of any time in history.” |
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The PAYE system imposes a duty on the employer155
to account once a month (but quarterly for certain employers)156
for the tax that he has or ought to have deducted. PAYE is distinct from
provisions which direct that basic rate tax is to be deducted at source,
eg under the scheme for payments to sub-contractors.157Where
the |