HMRC pilots the PAYE pilot

HMRC HAS DECIDED it will pilot its real-time PAYE reporting in-house.

The idea behind the RTI is that employers and pension providers will be able to inform the taxman on a real-time basis of any tax changes for their employees. For example, if they are made redundant or leave, instead of a printed version of a p45, employees will have their own tax profile which is updated instantly - well, near enough.

Testing the system in-house is either a stroke of genius or an ill-conceived plan.

To me the point of testing the system is to ensure companies from around the country will have the right capabilities and the right technology to sync with HMRC and will be able to launch this RTI system.

If it's in-house, the systems will all be the same, HMRC will know its systems are HMRC approved and will be readable by its own IT software. To me, the taxman should focus its energies on gauging the quality of data coming in from the other 'piloteers'. Or am I missing the point?

If the test is simply to ensure that accountants are ready, that they understand how to use the system, and pick up any bugs, then that's fine. However, I would have thought that payroll specialists shouldn't find the type of data they'll need to input too much of a push.

I thought the pilot was to ensure systems are all up and running, that the IT companies that provide payroll software are ready to roll out, and that they all worked seamlessly with HMRC.

Also I'm unsure on the tight turnaround schedule for this RTI. If the pilot is successful, most employers will join the regime in April 2013, and all employers will adopt in October next year.

However, it was only last year that vital information was provided to the software providers to get their kit up to scratch. That's just more than two years to create and thoroughly test a brand new piece of software that will be used by all companies in the UK.

iXBRL had a tight turnaround of about five years and still some of the biggest software companies were not ready. I wait with baited breath to see what will happen to RTI - are we set to see yet another tax technology deadline extension?