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HM Revenue & Customs (HMRC) has announced an extension of its Business Records Checks programme.
Posted on: 25 Sep, 2011 03:16:10 am

HMRC is to change its Pay As You Earn (PAYE) system to detect owed deductions on a monthly basis, rather than yearly, in a bid to make the system easier for employers.

Using Real Time Information (RTI), tax and deductions will be transmitted to HMRC each time an employee is paid, meaning employers will no long be required to provide information using forms P35 and P14 after the year end or to send p45/46 when employees start or leave employment.

The phased introduction of RTI will begin in April 2012 with an initial pilot. HMRC hope to increase the number of employers joining RTI during 2012-13 following the scheme's success. 

South east accountants and business advisers James Cowper welcomed the move, stating it will no longer unfairly punish employers with unknown systematic errors in their PAYE payment systems.

Nick Butler, head of JC Payroll, James Cowper’s dedicated payroll bureau, said: "This is a sensible decision from HMRC and will be a relief to many business owners. Together with the notifications from HMRC that already exist when a late payment is made, businesses now have every opportunity to avoid substantial and unexpected year-end penalties."

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