Tax man says please stop paying!

10th March:

Since its introduction in April 2003, Working Tax Credit has been paid via employers to supplement the wages of people on low incomes but employers are being reminded that they must stop paying it via their payroll by the end of March 2006.

As part of the Government's commitment to remove regulatory burdens on business, HM Revenue and Customs (HMRC) [http://www.hmrc.gov.uk] will now be paying all claimants directly from April. Employers should have received a final "stop notice" for each of their employees in receipt of Working Tax Credit.

If they have not, they should contact HMRC immediately to arrange a stop date. On no account should employers make Working Tax Credit payments to employees after 31 March 2006.

If employers' payroll arrangements mean they would not normally pay Working Tax Credit for March until April, they can contact HMRC now to arrange an earlier stop date. If they need help or more information, they should telephone 08457 143 143. Employees with questions about tax credits should telephone the Tax Credits Helpline on 0845 300 3900.

The Government announced the proposed changes in last year's Budget as part of its pledge to reduce the red tape burden on businesses. It estimates that the change will result in annual savings to business of between £10 million and £15 million in 2005-06 and between £110 million and £115 million from 2006-07 onwards.