HM Revenue & Customs (HMRC) is alerting businesses to impending real-time information (RTI) changes to the PAYE...
RTI intends to allow employers to report tax and national insurance deductions from employees’ wages and salaries on a real-time basis.
HMRC estimates businesses will see administration costs reduced by £300m after the system is up and running, as PAYE is reported.
But the department has been criticised in an official report for being “unduly complacent” about the roll-out of RTI system crucial to the Universal Credit programme.
Anita Monteith, technical manager for SME and personal tax at the Institute of Chartered Accountants in England and Wales (ICAEW), welcomed HMRC’s move in making businesses aware of the change, but said SMEs could still experience problems with RTI after implementation.
“My concerns are about the roll-out of all of this. RTI as a system hasn’t been checked live, HMRC has now done all it can,” she said.
"I’d expect that will be problems with people who have none standard payrolls. But thinking about how things will progress, there are all sorts of problems with having joined up computer systems and how it will link in with UC.”
She said the key message to small businesses will be ensuring all data is entered correctly into the system, as the complexity of the whole system and how it will link up with UC could cause huge problems further down the line.
Lin Homer, CEO of HMRC, said: “RTI delivers on all fronts. Business costs will be cut by £300m a year, employees will be taxed more accurately and fraud and error in the tax credit system will be reduced by hundreds of millions of pounds every year.