Employers will have to administer tax credits
From April employers who run PAYE schemes are required to pay tax credits into employees’ wage packets if they are eligible for either the Working Families’ Tax Credit or the Disabled Person’s Tax credit. The Inland Revenue will notify employers if one of their employees becomes entitled to receive a tax credit. They will be told the amount of the payment that has to be made, but will not be told what type of tax credit it is or how it is made up. In order to pay the tax credits, employers will have to use some or all of the PAYE tax, national insurance contributions and student loan deductions which they have taken from the employee’s pay.