HMRC moves key tax service online

HMRC wants businesses to submit data online

All businesses that employ more than 50 people will be required to submit employee tax information online rather than on paper from April.

All workers' P45 and P46 forms, as well as pensions information, must be submitted via the internet to HM Revenue & Customs (HMRC).

Stephen Banyard, director of HMRC's Business Customer Unit, said that the move will benefit all parties.

"It's simpler, faster and more secure and therefore works better for employers and employees," he said.

The service is already available, and three and a half million forms have already been received online.

HMRC has been working with commercial payroll software providers to include a function that will automatically submit forms, and most have now adapted their products.

Banyard said that, while the aim is not to catch businesses out, those who do not comply will eventually be penalised.

The move is one of a number of recommendations made by Lord Carter in his review of HMRC's online services.

From 2011 it will be obligatory for businesses with fewer than 50 employees to provide employee information in the same way, though they can choose to do so now if they wish.