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Small firms given extra RTI breathing room

12 June 2013
Issue: 4407 / Categories: News , RTI , Employees , Income Tax

Reporting relaxation extended to April 2014

HMRC have announced an extension to the easing of real-time information (RTI) regulations for small firms.

The temporary measure will now run to April 2014 – having previously been scheduled until October 2013 – and will apply to businesses with fewer than 50 employees, meaning they will not be required to change their approach to RTI halfway through the tax year.

Firms will still have to report through the new PAYE system, but only once a month rather than each time they pay their members of staff, as is the case for larger employers.

The breathing room – introduced in March – provides time to adjust to RTI for organisations that remunerate employees at least weekly but run their payroll only at the end of the month, according to the Revenue.

Around one in six payments reported under RTI since the system was launched in April 2013 has been made by firms making use of the easement, HMRC figures show.

Businesses of all sizes will be expected to report in real time from April 2014, but HMRC say they are continuing to work to identify long-term issues raised by the requirement that information be reported on or before payment.

The Chartered Institute of Taxation’s Colin Ben-Nathan praised the Revenue for a “very sensible” move that shows the department has listened to the “concerns of small employers, their agents and the organisations that represent them”.

“It will help small employers continue to engage positively with RTI and to keep the costs of RTI reporting to a minimum,” said Ben-Nathan, chairman of the professional body’s employment taxes sub-committee.

His sentiment was echoed by Paul Aplin, a partner of accountants AC Mole & Sons, who added a note of caution that the ‘on or before’ rule will be a “burden” on the smallest firms unless it is relaxed permanently.

Issue: 4407 / Categories: News , RTI , Employees , Income Tax
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