The Government recently published a consultation document on the major changes planned to the way PAYE information is collected. This will see the introduction of a new system where HMRC collects real time information (RTI) for PAYE. The system will involve employers sending information about tax and other deductions from employees' pay when the employee is paid, rather than at the end of the tax year.

The draft regulations recently published by HMRC introduced a new leaver statement for employers to use in place of the P45 when employees moved jobs. Currently a P45 is issued to employees who leave their employment or lose their job. The P45 provides a record of an employee's pay and tax deducted from it during the tax year. HMRC have now confirmed that following the consultation and a workshop with employers and representative groups the P45 will be retained for all employees and that plans to introduce a leaver statement have been dropped.

HMRC's Acting Director General for Personal Tax, said:

'We have been working closely with employers and stakeholders about the introduction of RTI. Employers told us to keep the P45 – which is exactly what we have done. RTI is on track and we want to work in partnership with employers and other stakeholders to make its introduction as smooth as possible.'