HM Revenue & Customs (HMRC) has confirmed that Real Time Information (RTI) is going ahead. The system aims to improve the operation of Pay As You Earn (PAYE). Under RTI, employers will report tax and NICs deductions at the same time as they pay their employees, rather than at year end.

HMRC's aim of Real Time Information is to:

• make it easier to ensure individuals pay the right tax after a change of job and remove the need for the P45/P46 process over time;
• offer the prospect of simplifying the PAYE end of year reconciliation process for employers and HMRC;
• remove much of the uncertainty that leads to errors in the Tax Credits system; and
• support the introduction of the Universal Credit from October 2013.

Following the initial consultation, HMRC has confirmed:

• A pilot will begin in April 2012 with volunteer employers and software developers;
• Work to ensure data quality will begin from October 2011 and continue until all employers have moved to the new system successfully;
• Subject to successful completion of the pilot, employers will be required to start using the RTI system from April 2013 and all employers will be using the RTI system by October 2013;
• It will invite software providers and their clients to participate in the pilot.

If you are an employer who wants to take part in the pilot, you should contact your software provider.