Following discussions with the professional bodies and others in the profession, HMRC has announced that it will extend the temporary relaxation of the new RTI reporting rules for businesses with fewer than 50 employees from October 2013 until April 2014. At 6 April 2014 this relaxation will come to an end and the full RTI reporting rules will take effect. This is a welcome change in policy by HMRC as it simplifies things for SMEs as the previous intention had been to introduce the full RTI reporting rules from October 2013.
As is the case at present, qualifying employers are still required to report through the new system, but are able to do so once a month, rather than each time they pay their employees. This gives small businesses that pay weekly (or more frequently), but who only run their payroll at the end of the month, some extra time to adjust to the full extent of the ‘on or before’ requirement of RTI reporting.
According to HMRC’s Director General for Personal Tax, Ruth Owen:
“The roll-out continues to exceed our expectations. I am delighted that 83 per cent of SMEs and 77 per cent of the smallest businesses are already on board. We will now write to the minority of employers who are not, to establish how we can help them meet the requirements of reporting in real time.”
This means that in excess of 1.4 million employers are now reporting their PAYE in real time. HMRC also confirm that information about 44.5 million payments made to employees between 6 April and 5 May was successfully received through RTI reporting.
From April 2014, all employers need to plan to be reporting in real time, but this extension to the relaxed reporting arrangements allow HMRC more time to work with businesses to identify whether there are any specific circumstances with on-or-before reporting that it needs to cater for in the longer term.
PAYE information reported in real time is already being used by the Department for Work and Pensions (DWP) to calculate Universal Credit amounts paid to people in its pathfinder pilot in the north west of England, ensuring the amount of benefit accurately reflects their level of income.
Colin Ben-Nathan, Chairman of the CIOT’s Employment Taxes Sub-Committee, commented:
“On or before reporting’ has been a significant concern for small employers. This announcement is good news and shows that HMRC has continued to listen 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.”
At John M Taylor & Co we are continuing to speak to our clients to keep them up to date with changes in the RTI reporting rules. We are working closely with those who benefit from the relaxation in the reporting rules to help them adapt to the new ‘on or before’ rules which will now apply to them from 6 April 2014.
Posted – 17/06/2013