New proposals (note 'proposals') from HM Revenue and Customs (HMRC) could (note 'could') take the power to calculate employees' tax away from employers and give it to a centralised tax system.

HMRC have released a discussion paper on potential improvements to the pay-as-you-earn (PAYE) system.

It states: "Under centralised deductions the employer would send the gross payment through the electronic payment system to a central calculator where the deductions calculated by HMRC would be made automatically. The resulting net payment would then be sent to the individual's bank account and the deductions would be paid directly to the Government."

The discussion paper is available on the HMRC website

In the UK Ebbie tax liabilities are currently calculated by employers based on the income they earn in that particular job

"Should someone receive income from more than one source – an employee doing several part-time jobs or a pensioner receiving a couple of pensions and investment income, for example – HMRC later reconciles the information it has received about an individual's earning to check that he or she has paid the correct amount of tax.
This should normally take place soon after the end of the relevant tax year, but HMRC has admitted in the past two weeks that it has fallen behind with such reconciliations

The proposal stressed that at no stage would HMRC or its agents have direct access to any money or information contained in a taxpayer's bank account."

HMRC considers 'centralising' tax system
- a slightly less 'dramatized' account than some other headlines