"PAY AS YOU GO"

Auckland Star, Volume LXXIV, Issue 227, 24 September 1943, Page 3

"PAY AS YOU GO"

INCOME TAX PLAN British Wage-earners Will Soon Be On- Weekly Basis N.Z. Press' Association—Copyright Rec. noon. LONDON, Sept. 23. Ten million wage earners in Britain will soon be paying their income tax weekly. Only 3,000,000 taxpayers are not affected by the new "pay as you go" plan, which operates from April 6, 1944. The plan will apply to any person whose wage is calculated and paid weekly, whether or not he is a manual worker. Professional men and others engaged at a yearly salary, but paid weekly, will be included. Theoretically Treasurv stands to lose £250,000,000 sterling because the new plan means "forgiving" part of the income tax which should be paid in 1944. Any loss, however, will be offset b3' the gain of immediate payments of tax in case of new workers and of earlier payments on rising earnings.

The Press generally welcomes the scheme, mainly on the grounds of its simplicity and ingenuity. The plan also has the support of the Employers' Confederation and the Trade Union Congress.

The new system does not involve elaborate calculation by employers. Each wage earner is given a code number. corresponding to his tax allowance. The employer is supplied with a tax deduction card for each earner showing the code number, and on this he records week by week the pay and. tax deduction. He is also given a book of tables showing for each code the total tax due on the total pay up to each pay day. In compiling the tables, the proportional part of the tax allowances due for the year is set against the total pay to date. This means that the deductions will keep pace with the accruing liability each pay day, and "pay as you earn" is thereby achieved.