Modernising the
PAYE system through real time information moved a step closer
today when HM Revenue & Customs (HMRC) published a
consultation document “Improving the operation of Pay As You Earn:
Collecting Real Time Information”.
PAYE real time information means employers will send HMRC
information about tax and other deductions from employees’ pay
when the employee is paid, rather than at the end of the year as
at present.
The Exchequer Secretary to the Treasury, David Gauke MP, said:
“We are determined to improve the way the PAYE system works and
real time information has the potential to reduce burdens on employers.
“Introducing real time information is an important step in
modernising PAYE and we want to hear the views of employers,
software suppliers and the payroll industry as we develop the new
system.
“Real time PAYE information will also support the Universal
Credit by enabling DWP to update information about claimants’
financial circumstances much more quickly without the need for
claimants to provide information about their income.”
HMRC’s Stephen Banyard, Acting Director General Personal Tax, said:
“We are working closely with customers to develop the real time
information system. We will pilot the system from April 2012 and
begin to move employers onto the new system in stages over the
following 18 months. We expect all employers to be using the new
system by October 2013.”
We envisage that real time information will mean that
annual employer returns can be phased out, reducing costs for
HMRC and employers HMRC will use the real time information to
update records when a taxpayer changes employer - removing the
need for employers to separately send forms P45 or P46HMRC will
have the real time information needed to support the Government’s
welfare reform agendaHMRC will be able to help prevent and detect
errors and fraud within the welfare and PAYE systems HMRC will not
need to wait until year end to identify underpayments by employers
and collect those debts, andin some circumstances, HMRC will be
able to adjust employees’ tax codes in year to reflect their
changing income and therefore, over time, reduce the need to send
employees repayments or bills after the end of the year.
This is the second stage of consultation. There were almost 400
responses to the discussion document “Improving the Operation of
Pay As You Earn” in July 2010. The majority of respondents were in
favour of moving to a real time information system for PAYE. The
consultation document issued today summarises responses to the
July discussion document and looks in detail at options for
implementing a new real time information system.
Notes to Editors
1. Pay as You Earn (PAYE) is the system that collects the tax
and National Insurance contributions due from millions of people
in employment. It also collects tax on many private pensions, is
used to collect student loan repayments and helps employers
calculate statutory payments for parental responsibilities or
sickness. 2. “Improving the operation of Pay As You Earn (PAYE):
Collecting Real Time Information” can be found at
http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_ConsultationDocuments&propertyType=document&columns=1&id=HMCE_PROD1_030851
3. The Government welcomes responses to the issues and questions
raised in this discussion paper by 28 February 2011. 4. Please
send responses to this consultation document to: HM Revenue
& Customs, PAYE Consultation, Room 1/40, 100 Parliament
Street, London, SW1A 2BQ Or email to
paye.consultation@hmrc.gsi.gov.uk 5. Improving the Operation of
Pay As You Earn (PAYE) – published in July 2010 – can be found at:
http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_ConsultationDocuments&propertyType=document&columns=1&id=HMCE_PROD1_030623.NAT
58/10Issued by HM Revenue & Customs Press Office Press
enquiries only please contact:
Contacts:
Helen Jones
Phone: 020 7147 2328
helen.a.jones@hmrc.gsi.gov.uk
HMRC Out of Hours
Phone: 07860 359544
NDS.HMRC@coi.gsi.gov.uk