HMRC Make RTI Easier for Small Businesses

April 15, 2013 - PRLog -- Office Assistants (http://www.officeassistants.org/) has been looking at the the requirement for real time information (RTI) to HMRC on payment to employees, which was phased in on 6 April. This means that details must be sent to HMRC every time a payment is made to a member of staff. The method of doing this is to send this information electronically using payroll software as part of the routine payroll process. The Revenue was aware that this has been causing headaches for many small businesses.          

Those finding it most difficult run a payroll once a month, but actually pay staff more often, so to comply with RTI they would have to completely change their procedures. Many were just not able to do it by 6 April.

Easement Arrangements

HMRC has therefore temporarily changed the rules for businesses with fewer than 50 employees. They can report all payments as and when the monthly payroll is run, as long as it is before the 6th of the following month.

At present, this just gives organisations an extra six months to get ready for RTI as it only applies until 6 October. It will, however, be reviewed in the interim. The chairman of the Federation of Small Businesses, John Walker, has said that he hopes it will become a permanent measure. This is not a sure bet, so Office Assistants (http://www.officeassistants.org/) advises that, in the meantime, all small businesses need to consider how to be ready by October and be able to take appropriate action.

Reminder of the RTI Requirements

Whether they are subject to the real time requirements or are allowed to report monthly, all businesses must now be registered for PAYE online, and it is no longer possible for the in-house payroll function to be manual unless the details are passed to a payroll bureau to make the returns. Payroll software providers are building in the RTI function to their products and existing systems have had to be updated to include it.

It is vitally important for businesses to have complete and accurate information on each member of staff, however often, and however much, they are paid. Even temporary staff must be included if the business pays them. RTI is the responsibility of the business even if payroll is outsourced, so owners and directors need to be sure that providers are RTI ready. RTI may mean that additional information is required on the payroll system. Full guidelines on the reporting requirements are posted on the HMRC website.