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The Treasury’s proposed overhaul of the PAYE system is to go ahead with a pilot scheme that will be run next year.
April 2012 will see the launch of Real Time Information (RTI), which will be trialled by volunteer businesses their software developers before being officially rolled out across the country 12 months later, subject to a successful test period. All employers are expected to be using the new set-up by October 2013.
Under RTI, bosses will report tax and National Insurance contributions deductions at the same time as they pay their members of staff, rather than at year-end when the conciliation process for employers and HMRC is promised to be made simpler.
The PAYE revamp is also intended to more easily ensure that individuals pay the right tax following a change of job, remove the need for the P45/P46 process over time, and remove uncertainty that leads to errors in the tax credits system.
The changeover – first mooted by the government last July – was criticised last month by professional tax and accountancy bodies for having been rushed through the consultation process.
But the director of HMRC's business customer unit, Stephen Banyard, said the department had ‘listened to the concerns of payroll providers and employers surrounding the proposed mandation [sic] date and amended our plans to take these into account’.
When they mean each payday do they mean, if a weekly payroll, a weekly submission? What about late info. We all get late P46s and being told about someone late. Submission by the 19th of the following month would be most sensible, just like CIS.