HM Revenue & Customs has confirmed that it will go ahead with Real Time Information (RTI) for Pay As You Earn employees. RTI aims to improve the operation of PAYE, as employers will report tax and NIC deductions at the same time that they pay their employees, rather than at year end.

HMRC's aim for Real Time Information is to:

- Make it easier to ensure individuals pay the right tax after a change of job and remove the need for the P45/P46 process over time

- Offer the prospect of simplifying the PAYE end-of-year reconciliation process for employers and HMRC

- Remove much of the uncertainty that leads to errors in the tax credits system

- Support the introduction of the universal credit from October 2013.

Following the initial consultation, HMRC has confirmed that a pilot will begin in April 2012 with volunteer employers and software developers. Work to ensure data quality has already started and will continue until all employers have moved to the new system successfully.

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

Menzies Payroll Bureau is participating in the HMRC pilot scheme, which starts in April 2012. This will ensure we are fully compliant by 2013.

If you should require further information regarding the RTI regulations please do not hesitate to contact us.