Real Time PAYE

Under the current PAYE system employers only submit information to HM Revenue & Customs once a year when the Employers Returns (P35) are submitted.

HMRC have released a consultation paper that will radically change all this.

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’.

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.’

The government welcomes responses to the issues and questions raised in this discussion paper by 28 February 2011.

We will keep you informed of developments.

About the Author

Mark Higham

Is the Managing Partner at Numero Accountancy LLP and an ACCA qualified accountant. Having spent time working in large Plc's and Private Limited Companies in Senior Finance roles Mark start his own practice in 2005. In this time Mark has been a finalist in Doncaster Chambers Entrepreneur Year and Numero have been finalists in the Rotherham Chamber New Business Start-Up and Most Innovative Use of Technology Awards.

Posted on 6th February, 2011