Posted:07-August-2012
Get payroll reform in proportion urges TaxAssist Accountants franchise
A small business tax specialist is urging a sense of proportion from HMRC on proposals to impose Real Time Information (RTI) on payroll next year.
TaxAssist Accountants, which advises small businesses, is calling for the staggered introduction of the new system and periodic payroll data submissions, rather than every time an employee is paid. Jo Nockels, Communications Manager of TaxAssist Accountants said:
“The raft of employment red tape is already colossal and when small businesses are already being scrutinised by HMRC’s taskforces and battling to keep their heads above water, the government and HMRC should really be encouraging or incentivising employers to take on new staff, not making the process more difficult. At the very least, we would like to see the Government exempt micro businesses from RTI.
“HMRC has vastly underestimated the upheaval RTI will cause; both in terms of migrating to the new system and the ongoing administrative burden. We also agree with the All Party Parliamentary Taxation Group (APPTG), that although HMRC has attempted to calculate some elements of RTI compliance costs, they have not fully appreciated the burden for small business owners. And to date, HMRC has not calculated the software costs for employers.”
“APPTG suggest an ‘RTI light’ approach for employers, which works well in Germany and Turkey for example. In these countries, employers’ reporting requirements can be monthly, quarterly or annual and are determined by the level of the wages tax to be paid. We think having a similar system in the UK would be much fairer than the current proposal.
“Phased implementation would also give small businesses more time to adapt to the changes, in the same way that small employers have been given until as late as 2017 to enrol employees into a pension scheme and pay pension contributions.”
A joint survey, issued by TaxAssist Accountants and the All Party Parliamentary Taxation Group (APPTG) found that 64% of employers were not aware of the correct deadline for PAYE RTI implementation, 73% had no idea how much it would cost and 61% did not know what it meant.*
The APPTG is urging HMRC to prioritise businesses’ needs, rather than being fixated with the October 2013 RTI implementation date and has suggested that a working group be established to consider the benefits of other options. Under RTI, all employers will submit payroll data (i.e. income and deductions such as PAYE and National Insurance) electronically to HM Revenue & Customs (HMRC) via their payroll software at-or-before the point they pay an employee. RTI will therefore be a radical shift from the current annual reporting requirement for employers.
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