By Daniel Hunter

Real Time Information (RTI) moved a step closer today (Wednesday) when the pilot was launched, with the first of 10 volunteer employers submitting their RTI return.

RTI will make it easier for employers, pension providers and HM Revenue & Customs (HMRC) to administer PAYE. Under RTI, employers and pension providers will tell HMRC about PAYE payments at the time they are made — as opposed to only at the end of the year.

Most employers will join RTI from April 2013 and all employers will be using the RTI service by October 2013.

“RTI will ensure that the PAYE system meets the needs of the 21st century. It will improve the service to taxpayers by making it easier to ensure that people pay the right tax after a change of job," David Gauke, Exchequer Secretary, said.

“HMRC is committed to a smooth and on-time transition. The start of the pilot today demonstrates that RTI is on track.

”RTI will remove administrative burdens of £300 million a year from employers, mainly from the abolition of the end-of-year PAYE returns process — the biggest single contribution that any tax change could make.”

Confirming that HMRC is one of the 10 volunteer employers to join the controlled go live , Stephen Banyard, Acting Director General for Personal Tax, said the pilot will allow all problems to be eradicated before it is launched for real.

“We have been working in close partnership with stakeholders to ensure that RTI will be introduced progressively, to give time for testing the new systems and processes and allowing them to bed in," he said.

“The pilot will allow us to iron out any wrinkles in a small, controlled environment so that we can ensure RTI is working smoothly as more and more employers join the pilot. We are working closely with employers and the payroll industry but having HMRC take part in the pilot will allow us to see first-hand how it is working from an employer’s perspective.

“A specialist team of RTI experts will be on hand to support employers through the pilot.”

RTI will support the operation of Universal Credit — the Government’s flagship welfare programme, which brings together means-tested in and out of work benefits, Tax Credits and support for housing and will improve work incentives and make work pay.

“I welcome the pilot announced today — both Universal Credit and RTI are on track and on time to support the implementation of Universal Credit from October 2013," the Minister for Welfare Reform, Lord Freud, said.

“Interlinking Real Time information with Universal Credit will enable us to process claims automatically and more efficiently, allowing us to make the right payment based on real time earnings.”

Join us on
Follow @freshbusiness