A new email facility has been introduced this year for those PAYE schemes wanting to claim a cheque for their £150 incentive payment for filing their 2006/07 return online.

Of course the easiest way to claim the payment is to deduct it from your next PAYE remittance, but many small employers, or their agents, want to physically see the colour of HM Revenue & Customs' money.

Once you're received notice that your incentive had been credited to your PAYE account, by letter if you've not registered for PAYE online or to your Data Provisioning Service, you can send the email request. You'll need your Cumbernauld or Shipley Accounts Office reference, your PAYE reference and your personal details including an email address so they can confirm receipt of the request.

Cheques will be issued over a period of weeks - and remember that any PAYE arrears outstanding will de deducted first.

Agents can claim for up to ten clients at once and should select whichever Accounts Office deals with the majority of clients for whom the request is being made. For more information go to http://www.hmrc.gov.uk/efiling/help/claim-tax-free-pay.htm

The date for the introduction of the second phase of additional annual leave has been delayed until 1 April 2009.

The Department of Trade & Industry (now the Department for Business, Enterprise and Regulatory Reform) announced its change of heart in response to major concerns expressed by a number of industry sectors.

The first increase to 4.8 weeks will still come into effect on 1 October 2007. Payment in lieu of this extra 0.8 weeks, not normally permitted for statutory leave except on termination, is to be allowed as a transitional measure until April 2009 to allow employers to adjust to the new rules.

To encourage early compliance with the regulations employers need take no account of the new rules as long as by the 1 October 2007 they already:

-provide at least 28 days holiday to all workers, or the pro-rated equivalent for part-timers;

-do not permit carry forward of holiday past the next holiday year; and

-calculate holiday pay using a formula that is at least as favourable as the 'week's pay' defined in the Employment Rights Act.

This consultation does not signal the end of PAYE, but rather is aimed at reducing the £22 billion of tax outstanding to the Treasury coffers – a massive 5% of all receipts.

In order to reduce this percentage HMRC are consulting on a range of process and legal changes that they hope to phase in over the next five years.

Traditionally tax debts have been seen in isolation, but as part of HMRC's strategy to move to a 'Whole Customer View' (WCV) approach to taxpayers' affairs the individual or business will be considered holistically such that debts owed to HMRC could be offset by refunds due. As part of the same plan PAYE records are being moved on to the National Insurance system NIRS2 next year, removing the need for employment records to be stored in 12 separate tax databases where multiple employments could not be joined for each taxpayer, and were instead stored under separate PAYE scheme numbers.

The range of payment methods will also be extended to allow:

- payment by credit card;

- direct debit arrangements of a fixed payment on account much like a utility bill;

- a new system called Faster Pay that the banks are introducing in 2008 where payments are directed to a bank account in a matter of hours using the phone or internet; plus

- the recovery of small debts of up to £500 through the employee's tax code. 

With PAYE contributing a massive £200 billion (47% of all taxes collected) they are keen to look at the current surcharge regime to assess if more can be done to encourage timely remittances.

Adopting the carrot and stick approach, HMRC want an early dialogue with those who are unable to pay whilst at the same time having the legal powers to tackle those who won't pay and in so doing undercut their compliant competitors. Much is made of the need to file on time as well as accurately, so that HMRC an establish amounts that are owed or due to be repaid.

One wonders if this signals a desire to introduce a late filing penalty for in-year forms based on the start or leave date of the employee? At present the draft regulations only include a non-online filing penalty regime.

The consultation is open until 17 September 2007.