August 31, 2012
One in three small businesses do not know about HMRC's plans to introduce Real Time Information (RTI) in April 2013**. The new rules require all employers to provide employee PAYE, national insurance and student loan information to HMRC at the point of payment every month, rather than at their year-end.
However, 36% of small businesses are unaware of this initiative, according to a survey of 1,100 small businesses carried out by Sage — despite the fact that it is such a fundamental change to payroll and small business reporting requirements.
And the Sage survey finds that only one in ten see the benefits of the change, even though it is intended to make PAYE administration easier.
Neilson Watts, associate product manager at Sage, said: "It is concerning that so many businesses are unaware of the changes. RTI will impact all businesses, regardless of their size, and with its introduction firms will benefit by streamlining processes, relieving the much dreaded nightmare of payroll year-end and relieving the increased administrative burden for payroll at this time of year."
HMRC is helping business to prepare for the change with a video on YouTube which covers what RTI means for employers, the main changes that will be introduced, a timetable and other help and support that is available. More information can be found on the HMRC website.
However, one crucial detail in the video is that firms that currently use the HMRC's free online return and forms PAYE service will not be able to use them for routine RTI submissions. The video says, "If you currently use this service to submit forms to HMRC, you'll need to consider the most appropriate tools for your RTI submissions."
** After this article was published, HMRC announced a "relaxation of reporting arrangements for small businesses". According to HMRC: "Until 5 October 2013, employers with fewer than 50 employees, who find it difficult to report every payment to employees at the time of payment, may send information to HMRC by the date of their regular payroll run but no later than the end of the tax month (5th)."