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‘Real time’ pilot on way for PAYE

A major change to the way that employers submit information on tax and national insurance for their employees is to begin next year with a pilot programme.

Following consultation on Real Time Information (RTI) – under which employers will report tax and national insurance deductions at the same time as they pay their employees, rather than at year end, via an annual P35 – the pilot will begin in April 2012 with volunteer software developers and employers.

Subject to successful completion of the pilot, employers will be required to start using the RTI system from April 2013, with all employers using RTI by October 2013.

HM Revenue & Customs (HMRC) announced on 23 November that it already has 300 volunteer employers for the pilot and, through software developers, is looking to recruit up to 1,300 more to join in July next year and a further 250,000 from November 2012, depending on the results of the first phase of the pilot.

David Gauke, Exchequer Secretary to the Treasury, said: "We need a PAYE system that can meet the demands of the 21st century workplace.

“Real Time Information will support improvements to the PAYE system making it more accurate for taxpayers and easier for employers and HMRC to administer.”

Link: HMRC information on RTI