UK-based HMRC extends Open Banking to payroll payments

Friday 28 May 2021 13:41 CET | News

The UK’s tax department has gone live with a further step in embedding Open Banking into its operations, according to Global Government Fintech.

After HM Revenue & Customs (HMRC) introduced a ‘Pay by bank account’ option for people making online self-assessment tax returns, it has launched a similarly Open Banking-enabled option for PAYE (Pay-As-You-Earn) payments – tax paid direct from workers’ salaries. The department will further extend the Open Banking-enabled payment option to corporation tax and value-added tax (VAT). The overall aim is to make payments to government simpler and safer.

Within the UK government, HMRC has been at the forefront of exploring the possibilities of Open Banking, which involves the use of open application programming interfaces (APIs) to enable bank account holders to share their financial data with third parties. More than three million UK citizens and businesses are now using Open Banking-enabled products in the private sector.

Extension of Open Banking to PAYE is most likely to appeal to organisations’ payroll managers, whose job typically includes logging employee pay, calculating deductions, distributing payslips – and making PAYE payments to HMRC. It is estimated that PAYE is applicable to about 30 million workers, making it a more significant tax regime than self-assessment, which is applicable to about 12 million.

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Keywords: Open Banking, financial data
Categories: Banking & Fintech
Countries: United Kingdom
This article is part of category

Banking & Fintech