Small Businesses Still Unaware of PAYE RTI Changes
Research from the Forum of Private Business has revealed that many small businesses are still unaware of Real Time Information (RTI) changes to the PAYE system.
Due to come into effect in April, RTI changes the duty of reporting payroll to HMRC from an annual task to a monthly one instead.
In September last year it was reported that as many as a third of businesses were still unaware of the changes to PAYE.
Worryingly, in the same study, only 10% of small businesses asked said that they believed RTI would be beneficial to them.
However, the new research from the FPB, whilst showing an increasing awareness of RTI amongst firms, has also revealed that there is still a "worrying" amount of businesses who are still "in the dark".
The figures, unearthed by the FPB’s quarterly study, Referendum, are a concern for small businesses, as the move to the new RTI system is less than two months away.
Phil Orford, the Chief Executive of the FPB, said of the results:
“Real Time Information is looming and while our research suggests there is a growing understanding of what this means for businesses, there are a significant number still ignorant and unaware.”
“The other important issue raised by our research is the huge lack of confidence small firms have in HMRC to cope with the changes – 65% of businesses expressing concern at this.”
“If nothing else, this paints a depressing picture of small firms’ confidence in a government department that is key to their operations. Those businesses involved with the RTI pilot run by HMRC last year were a little more confident here, but there are clearly still fears about how seamless the transition will prove to be.”
Orford did acknowledge the signs that more businesses have become aware of RTI, particularly in light of the deadline looming:
“The positive news though has to be that compared to earlier studies carried out just a few months ago, more than two thirds of small businesses now know what’s expected of them. While it’s likely this is in part because of the work we’ve carried out with our own members to raise awareness of RTI, it still suggests the message is slowly getting through.”
Compared to the research conducted by accounting software firm Sage last year, the forum’s data showed that more firms were onboard in seeing the benefits of RTI. The FPB reported that more than half of respondents saw RTI in a positive light. 20% of small businesses told the FPB that RTI was likely to force them to take on fewer employees.
Orford finished by saying:
“With this uncertainty in mind we are calling for HMRC to adopt a sensible and reasoned approach towards enforcement in the early stages. Already the government has announced the delay to some fining powers, but the effect of the switch to online reporting must not be underestimated, nor the cost of investing in new software ignored. Ideally we want to see a moratorium on fines in all but the most serious cases.”
The new HMRC regime will affect all businesses with paid employees.
Small businesses that need to know more about the RTI changes to PAYE should take a look at HMRC’s webpage Real Time Information – improving the operation of PAYE and the HMRC video Real Time Information – What it Means for Employers.