News

March 22, 2013

RTI reprieve for SMEs that aren't ready

At the eleventh hour – just two weeks before it is due to go live – HM Revenue & Customs (HMRC) has announced that some small employers will get longer to get ready for Real Time Information (RTI).

The move comes in recognition of the fact that some small employers – who pay employees weekly, or more frequently, but only process their payroll monthly – may need longer to adapt to reporting PAYE information in real time. As a result, HMRC has agreed a relaxation of reporting arrangements for small businesses.

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).

HMRC said it will continue to work with employer representatives to assess the impact of RTI on the smallest businesses and consider whether they can make improvements to real time reporting which will address their concerns.

Describing the announcement as "great news", John Walker, national chairman of the Federation of Small Businesses (FSB), said HMRC had "taken on board the FSB's concerns about the time constraints and problems that small firms will face when having to report in real time. We hope that HMRC make this regular reporting a permanent measure to help the smallest firms when they review the system in the summer."

Robert Downes, of the Forum for Private Business (FPB), said: "Nobody likes last minute changes, and this development perhaps hints at something of a panic at HMRC that many, many small firms still aren't fully prepared for RTI. However, this does seem the sensible course of action, because a tax system in meltdown come April is in nobody's best interest, and no doubt many firms will now be breathing a sigh of relief. It will though now add another layer of confusion around a subject that is already as clear as mud to many SMEs."