HMRC has announced that more than a million employers have started to use the new Real Time Information (RTI) PAYE reporting system in its first month of operation.

Ruth Owen, HMRC's director general personal tax, said: 'RTI is bringing PAYE into the 21st century, and it is amazing that we have reached the 1m mark in less than a month. This is at the top end of our expectations. However, we're not complacent and are carefully monitoring submissions, but so far things are going well.'

Owen said feedback from employers suggested RTI is 'easy to use' and urged any who had not started reporting in real time to do so quickly. HMRC provides guidance on implementing RTI via its website and social media, as well as a range of RTI software including free software for micro businesses with nine or fewer employees.

In its analysis of progress on RTI, CIOT says that HMRC's decision to relax the 'on or before' reporting requirement for smaller employers, which was announced in March and is scheduled to continue until October 2013, is a key factor in the high rate of take-up.

This allows employees with fewer than 50 employees who find it difficult to report every payment to employees at the time of payment, to send information to HMRC on the date of their regular payroll run but no later than the end of the tax month.

CIOT identifies this decision as having had a significant impact, easing the burden and costs of RTI for smaller employer and increasing the numbers who have moved to the new system, but cautions that HMRC needs to keep up its programme of support.

Colin Ben-Nathan, chair of CIOT's employment taxes sub-committee, said: 'The high volume of submissions since 6 April is also down to the sheer hard work of employers, agents, software companies, professional and other bodies, and HMRC working together. It is vital that this close working continues over the coming months.

'There have inevitably been some teething problems, as evidenced by the significant amounts of additional guidance being issued now by HMRC, and it will be a continuing challenge to get all of this through to employers and agents to ensure they are complying with the new rules.'

CIOT says it will be carrying out further research into any issues with how RTI is operating and will be looking for responses from HMRC, which could include making any relaxations permanent.