Under the present PAYE system, employers tell HMRC what deductions they have made from employees' pay at the end of the year. Reporting PAYE in real time will ensure that employees' tax records are accurate, so they won't face big PAYE overpayments or underpayments at the end of every tax year.
It will also provide accurate records on wages and tax for the forthcoming Universal Credit, so eligible employees will get the right amount of benefits or tax credits every month.
What is changing?
PAYE itself will not change - just the way, and how often, employers send PAYE details to HMRC.
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