Plans to introduce a leaver statement instead of a P45 have been withdrawn after consultation about Real Time Information (RTI), HMRC announced last week.
Regulations, as originally drafted, introduced a leaver statement for employers in RTI to use in place of the P45 when employees moved jobs. Following the consultation and a workshop with employers and representative groups, HMRC will retain the P45 for all employees.
RTI is being introduced to improve the operation of PAYE. It is intended to make the PAYE system easier for employers and HMRC to operate, and once bedded in, it will mean more employers pay the right amount in-year.
Under RTI, employers and pension providers will tell HMRC about tax, NICs and other deductions when or before the payments are made, instead of waiting until after the end of the tax year. The RTI programme is on track to start a 12 month pilot from April 2012 with 300 volunteer employers.
On behalf of members, Chartered Accountants Ireland made a submission as part of the RTI consultation process.
Further information on RTI is available on the HMRC website.