Real-time PAYE requirements relaxed for small businesses

Small businesses now have until October 5sup>th/sup> to file their real-time PAYE information in a reprieve from HM Revenue & Customs.

This month’s introduction of the Real Time Information (RTI) system means that employers will need to submit PAYE information every time an employee is paid rather than annually when the business submits its end-of-year tax return.

The extension has been put in place to help businesses with less than 50 employees who may be struggling to complete the increased frequency of PAYE filings.  In some cases small businesses may pay their employees weekly or more frequently, but only process their payroll monthly.

RTI is being introduced by HMRC to improve efficiency enabling them to check the data they receive from employers against their existing records to highlight any errors or changes that have occurred since the last payday.  They believe this will make queries quicker and easier to resolve.

HMRC said it will continue to work with employer representatives during the summer to assess and understand the impact of RTI on the smallest businesses and consider whether they could make improvements to real time reporting which will address their concerns without compromising the benefits of RTI.

Paul Aplin, Faculty Chairman of the Institute for Chartered Accountants of England and Wales (ICAEW) was pleased with the extension for small businesses, having previously highlighted concerns to MPs in November last year.  He said;

“Small businesses have been spared a new and unnecessary burden because ministers and HMRC listened.  Now we have to use the next six months to secure a permanent solution.  I am confident that we will be successful.”

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