Act now advice from employer support group on biggest change to PAYE payment since its introduction.
The Forum of Private Business is urging small firms still not ready for the biggest change to the PAYE tax system since its introduction in the 1940s not to ignore the issue and act now.
Real Time Information – known as RTI – will come into force on 6th April, at which point all firms that employ staff, regardless of numbers, need to have new payroll software installed.
While HMRC has promised an easy ride for firms that do make mistakes using the new system, and has even made a last minute temporary change allowing some concessions for certain small businesses that pay staff weekly, the Forum has said firms who’ve taken no steps at all to be ready for RTI could well find themselves in hot water with the Revenue.
And a snap poll carried out by not-for-profit support group this week has shown with just a few working days left until RTI launches, 18% of firms are still classifying themselves as not prepared. The study also revealed 60% were ready, with the remaining 21% saying RTI was not relevant to them i.e. they employed no staff.
"It’s quite clear that there are businesses out there still not ready even at this late stage. The message we would like to get out there now, even at this point, is that it’s still not too late to get on board for RTI – the ship has not sailed," said the group’s Head of Policy, Alex Jackman.
"We know it can seem a daunting prospect to small firms, but it’s just not an option to do nothing. Better to act now than have a phone call from an unhappy tax man after 6th April, and that could happen."
The Forum’s financial specialist, Rachel Andrews, who has been working with HMRC closely for the past two years with an RTI pilot scheme, said: "If I had any last minute advice for businesses it would be to have everything you need ready to go. So employee addresses, date of birth, and the correct NI number. The date of birth is more important now than previously, it has to be correct.
"And the correct NI number is also crucial. If any business is unsure to the number’s authenticity, they need to submit an NI validation check with HMRC, and they will come back to you," she said.
Small businesses which pay staff weekly or more frequently, should also be aware of the concession announced last week by HMRC on RTI compliance, says the Forum. The change effectively means these businesses will be able to submit payroll details monthly rather than in ‘real time’ until October, although they will still need RTI specific payroll software to do this.
Small firms still needing advice on RTI should contact HMRC direct, or contact the Forum’s helpline team on 0845 130 1722 for help and guidance on how to become compliant.