Instead of starting next month (April) – as originally planned, employers with fewer than 50 employees will now have until 5 October to comply with the new legislation and, until then, will be able to send information to HMRC by the date of their regular payroll run, but no later than the end of the tax month on the 5th.
The department said that it had taken the decision because although reporting in real time works well, as they say has been proved by their pilot scheme, some employers, who pay staff weekly or on a casual basis, may need longer to adjust to the new way of reporting.
Under the new RTI rules, employers must report PAYE information in real time, which means that employers must tell the taxman every time they pay an employee at the time that they pay them and must use payroll software to send the RTI payment details electronically.
This replaces the old payroll process of reporting to HMRC, when PAYE information would be submitted just once a year at Payroll Year End.
HMRC has claimed that the new method will simplify the PAYE process to make it less of a burden on both it and employers.
However, despite extensive advertising, social media campaigns and press releases, HMRC has realised that small businesses just are not ready, either through genuine ignorance of the change or because they have not had time to implement the necessary changes to their payroll arrangements, which could lead to problems both for them and HMRC.
Consequently, HMRC have said they will continue to speak to employer representatives and have even said that it will look at ways of improving the system for small business without compromising the success of the scheme
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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