EXCHEQUER secretary and Herts MP David Gauke has signalled the start of a tax revolution.
HM Revenue and Customs has launched a pilot for a Real Time Information (RTI) system involving 10 volunteer employers submitting returns.
Under RTI, employers and pension providers will tell HMRC about PAYE payments at the time they are made – instead of 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.
David Gauke, who represents Tring and Berkhamsted, said: “RTI will ensure 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.”
Mr Gauke added that the abolition of the end-of-year PAYE return will help remove red tape burdens of £300 million a year from employers.
HMRC hopes the pilot will iron out problems before the system is fully implemented.