Real Time Information (RTI) will be introduced in April, moving employers to a system that sees information on tax and national insurance deductions reported every time an employee is paid.
The department will remind firms in the letter of their obligations surrounding the introduction of RTI, while it believes firms will save £300 million in reduced administration costs when the system comes into effect.
Lin Homer, Chief Executive of HMRC, said that RTI "delivers on all fronts".
"PAYE directly affects every employee in the country and that is why it is vital that it reflects, on time and accurately, the tax circumstances of the millions of employees who depend on the system to get their tax right," she explained.
"Business costs will be cut by £300 million a year, employees will be taxed more accurately and fraud and error in the tax credit system will be reduced by hundreds of millions of pounds every year."
Posted by Emily Smith