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Compliance costs for employers: UK PAYE and National Insurance

Author

Listed:
  • David Collard
  • Michael Godwin

Abstract

This paper, based upon research financed by the Inland Revenue and the Contributions Agency of the DSS, presents calculations of the compliance costs for employers of PAYE and National Insurance in 1995-96. Total costs are estimated to have been of the order of £1.3 billion. The costs are very unequally spread across employers, whether measured per employee or per pound of tax raised. They are particularly high for small new employers. For the largest employers, these costs may be offset by the cash-flow benefits of acting as tax collectors. The composition of labour and other costs is calculated and estimates are made of compliance costs under various payroll ‘technologies’. The main determinants of compliance costs, for an employer, are analysed using weighted least-squares regression analysis. Finally, some policy implications are considered.

Suggested Citation

  • David Collard & Michael Godwin, 1999. "Compliance costs for employers: UK PAYE and National Insurance," Fiscal Studies, Institute for Fiscal Studies, vol. 20(4), pages 423-449, December.
    • Handle: RePEc:ifs:fistud:v:20:y:1999:i:4:p:423-449
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    File URL: http://www.ifs.org.uk/fs/articles/0015a.pdf
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    Cited by:

    1. Ryta Dziemianowicz, 2017. "Tax administrative costs as a component of tax transaction costs in Poland and other OECD countries," Ekonomia i Prawo, Uniwersytet Mikolaja Kopernika, vol. 16(2), pages 123-140, June.
    2. Das-Gupta, Arindam, 2004. "The Income tax compliance cost of corporations in India, 2000-01," Working Papers 04/8, National Institute of Public Finance and Policy.
    3. John Kitching, 2006. "A Burden on Business? Reviewing the Evidence Base on Regulation and Small-Business Performance," Environment and Planning C, , vol. 24(6), pages 799-814, December.
    4. Sebastian Eichfelder & François Vaillancourt, 2014. "Tax Compliance Costs: A Review of Cost Burdens and Cost Structures," Hacienda Pública Española / Review of Public Economics, IEF, vol. 210(3), pages 111-148, September.
    5. Das-Gupta, Arindam, 2004. "Compliance cost of the personal income tax in India, 2000-01: Preliminary estimates," Working Papers 04/9, National Institute of Public Finance and Policy.
    6. Bilitis Schoonjans & Philippe Van Cauwenberge & Catherine Reekmans & Gudrun Simoens, 2011. "A Survey of Tax Compliance Costs of Flemish SMEs: Magnitude and Determinants," Environment and Planning C, , vol. 29(4), pages 605-621, August.
    7. repec:npf:wpaper:09 is not listed on IDEAS
    8. repec:ind:nipfwp:08 is not listed on IDEAS
    9. repec:ind:nipfwp:09 is not listed on IDEAS
    10. Eichfelder, Sebastian & Schorn, Michael, 2009. "Tax compliance costs: a business administration perspective," Discussion Papers 2009/3, Free University Berlin, School of Business & Economics.
    11. repec:npf:wpaper:08 is not listed on IDEAS

    More about this item

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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