HM Revenue & Customs (HMRC) will require businesses to report PAYE information each time employees are paid.
HMRC has informed UK employers that it will require PAYE information, specifically tax, National Insurance Contributions (NICs), student loans and other deductions, to be reported in “real time”, stating that it will be “the biggest change to the operation of PAYE in over 60 years”.
The mandatory new requirement, which will begin to come into force from April 2013, with all employers expected to report information on all of their employees in real time by October 2013, is to enable HMRC to keep more accurate records so that over time more people will be paying the correct tax.
HMRC states that the information is to be sent electronically, with a range of payroll software for collecting the relevant information being available from April 2013 to suit individual requirements.
The change will mean that employers will no longer be required to send the end-of-year Employer Annual Return forms P35 and P14, nor P45 and P46 as the information will be included in the real time reports. However, expenses and benefits returns will still need to be sent annually, and staff will still need to be given certificates of tax and NICs paid using the P60 form.
HMRC states that it will write to employers in October 2012 to inform them of what they must do to prepare for the changes, and in February 2013 will confirm with employers the date from which they should begin reporting PAYE information in real time.