April 12, 2011
A new system aimed at improving the operation of the Pay As You Earn (PAYE) tax system has been given the green light by the government, HM Revenue amp; Customs revealed this week.
Under the new Real-Time Information (RTI) system, employers will report tax and National Insurance Contribution deductions at the same time as they pay their employees. The system will no longer require employers to provide information at the end of a tax year, as is currently observed.
"Real Time Information will support improvements to the PAYE system making it more accurate for taxpayers and easier for employers and HMRC to administer. We need a PAYE system that can meet the demands of the 21st Century workplace and ensure that the tax system works better,” said David Gauke, Exchequer Secretary to the Treasury.
And prior to Mr Gauke’s comments this week, the HMRC confirmed that a RTI pilot will begin in April 2012 with volunteer employers and software developers. If said pilot is successful, certain employers will be required to start using the RTI system from April 2013 and all employers will be using the RTI system by October 2013.
"We wanted people who use the system every day to give us their views on the collection of Real Time Information. We have listened to the concerns of payroll providers and employers surrounding the proposed mandation date and amended our plans to take these into account,” added HMRC’s Stephen Banyard.
"We want to work with software developers and employers to help us deliver the new system. I urge anyone interested in being involved in the pilot to contact us."
