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Tuesday, 12 February 2013

RTI still on track but many business owners unaware

HMRC  says the programme ( Real Time Information or RTI ) to change the way PAYE deductions are made and reported for all business is on track and “going well”.

However, a Federation of Small Businesses survey of 1,700 members showed a quarter did not know about the changes and only 16pc were prepared!  Given that they will have to report to the HMRC every time they pay an employee whether it is weekly, monthly or the occasional shift this is very worrying. The taxman is hoping to reduce a £3bn payments backlog.   In order to do the online reporting the businesses will of course have to have a computer and not all businesses use them.  Yes, businesses with up to 9 employees will be eligible for free software but they will still need to get the computers.  Supposedly businesses will see a £300m saving in reduced administration costs once the system is up and running but the initial time and investment is not something that many small businesses can spare at the moment.

HMRC wants to have the new set-up, which is linked to the introduction of the new Universal Credit system, working smoothly by October followed by a penalty regime for late or inaccurate filing.  Penalties are likely to be in place as early as next year.

If your business is in arrears with PAYE then you will need to take action now.  See our page on RTI and its implications for struggling businesses.

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