Warning bells have been sounded by MPs over progress in overhauling the PAYE system, with potential implications for plans to introduce universal credit from October 2013.

The report for the All-Party Parliamentary Taxation Group highlighted the fact that calculations of universal credit will depend on a new system of ‘Real Time Information’ (RTI), under which employers submit payroll data to HMRC at or before the point they pay an employee. It also voiced concern that HMRC may have underestimated the investment cost of RTI, as well as the migration cost and administrative burden for business. It accusesd the government of trying to ‘push change too fast for political means’.

The MPs recommended that business needs should be prioritised over the policy deadline for universal credit, and called for a delay until mid-2015 for the introduction of RTI. In the meantime people claiming universal credit would be expected to ‘self report’ their earnings instead.

Source: Jamie Black, PAYE at the Crossroads, All-Party Parliamentary Taxation Group
Links: Report | Telegraph report