Record numbers of employers report PAYE in real time
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12 June 2013
HM Revenue & Customs
More than 1.4 million employer PAYE schemes are now reporting
to HM Revenue and Customs (HMRC) in real time since the launch of new
tax reporting requirements in April.
This means that more than 83 per cent of small to medium firms
and more than 1 million (77 per cent) micro employers have already
started to report PAYE in real time, and that information about 44.5
million payments made to employees between 6 April and 5 May was
successfully reported online to HMRC.
After listening to stakeholders, HMRC has today announced that
it will be seeking to extend the temporary relaxation of the new
reporting rules for businesses with fewer than 50 employees from
October 2013 until April 2014, and that this relaxation will come to an
end at this point. The extension means that businesses will not be
required to change their approach halfway through the tax year.
The relaxation has meant that these businesses are still
required to report through the new system, but are able to do so once a
month, rather than each time they pay their employees. This gives small
businesses that pay weekly (or more frequently), but who only run their
payroll at the end of the month, some extra time to adjust to the new
From April 2014, all employers need to plan to be reporting in
real time, but HMRC is continuing to work with businesses over the
coming months to identify whether there are any specific circumstances
with on-or-before reporting that it needs to cater for in the longer
PAYE information reported in real time is already being used
by the Department for Work and Pensions (DWP) to calculate Universal
Credit amounts paid to people in its pathfinder pilot in the north west
of England, ensuring the amount of benefit accurately reflects their
level of income.
Exchequer Secretary to the Treasury David Gauke said:
“This is the biggest reform of PAYE since its introduction
nearly 70 years ago and we are bringing the system into the 21st
century. The transition is going well, and the vast majority of
employers are now reporting their PAYE information in real time,
meaning that HMRC’s records are becoming more accurate and up-to-date.
DWP is already using the new system to underpin its Universal Credit
pilot, helping it to be more responsive to changes in claimants’ income
levels. This is all good news, but we will continue to listen to and
work with businesses to ensure that all employers are reporting in real
time by April 2014.”
HMRC’s Director General for Personal Tax, Ruth Owen, said:
“The roll-out continues to exceed our expectations. I am
delighted that 83 per cent of SMEs and 77 per cent of the smallest
businesses are already on board. We will now write to the minority of
employers who are not, to establish how we can help them meet the
requirements of reporting in real time.”
Interviews with employers reporting in real time can be seen
1. Real Time Information (RTI) represents the biggest change
to the payroll system in over 60 years. It is designed to reflect the
labour market fluidity of the 21st century and deliver improved
accuracy to employers and employees. RTI means employers and pension
providers report deductions and payments they make to HMRC at the time
they are made, rather after the end of the tax year, as at present.
This enables the tax system to better ensure the right tax is being
taken at source.
2. Around 44.5 million payments to employees were reported in
the tax month from 6 April to 5 May. Of these:
- 83 per cent were reported on or before the payment was made
- a further 12 per cent were reported within six days of the
payment, which was agreed as a reasonable time for reporting for those
who faced practical difficulties in reporting in real time.
3. The RTI pilot was launched in April 2012 with just 10
employers and, by the end of the pilot on 5 April 2013, over 6 million
individual records were being reported in real time.
4. For most large employers, HMRC has specified a start date
between July and September 2013.
5. HMRC announced in March 2013 that employers with fewer than
50 employees, who find it difficult to report every payment to
employees at the time of payment, may send information to HMRC by the
date of their regular payroll run, but no later than the end of the tax
month (5th). This temporary relaxation was due to run until 5 October
6. HMRC is continuing to work with businesses to identify
whether there are any unusual circumstances it needs to cater for in
the longer term. But all employers need to plan to be reporting in real
time from April 2014.
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Article Published/Sorted/Amended on Scopulus 2013-06-14 12:13:59 in Tax Articles