Housewares Business-to-business magazine for housewares retailers and their suppliers
More than 1.4 million employer PAYE schemes are now reporting to HM Revenue and Customs (HMRC) in real time, since the launch of new tax reporting requirements in April.
Real Time Information (RTI) represents the biggest change to the payroll system in over 60 years. It is designed to deliver improved accuracy to employers and employees.
RTI means employers and pension providers report deductions and payments they make to HMRC at the time they are made, rather after the end of the tax year, as at present. This enables the tax system to better ensure the right tax is being taken at source.
The RTI pilot was launched last April with just 10 employers and, by the end of the pilot on April 5, over 6 million individual records were being reported in real time.
HMRC announced in March that employers with fewer than 50 employees, who find it difficult to report every payment to employees at the time of payment, may send information to HMRC by the date of their regular payroll run, but no later than the end of the tax month (5th). This temporary relaxation was due to run until 5 October 5.
After listening to stakeholders, HMRC has announced that it will be seeking to extend the temporary relaxation of the new reporting rules for businesses with fewer than 50 employees from October until April 2014. The extension means that businesses will not be required to change their approach halfway through the tax year.
The relaxation has meant that these businesses are still required to report through the new system, but are able to do so once a month, rather than each time they pay their employees. This gives small businesses that pay weekly (or more frequently), but who only run their payroll at the end of the month, some extra time to adjust to the new requirements.
From April 2014, all employers need to plan to be reporting in real time. But HMRC says it is continuing to work with businesses to identify whether there are any unusual circumstances it needs to cater for in the longer term. But all employers need to plan to be reporting in real time from April 2014.
Exchequer Secretary to the Treasury David Gauke said: “This is the biggest reform of PAYE since its introduction nearly 70 years ago and we are bringing the system into the 21st century. The transition is going well, and the vast majority of employers are now reporting their PAYE information in real time, meaning that HMRC’s records are becoming more accurate and up-to-date.”
HMRC Director General for Personal Tax Ruth Owen said: “The roll-out continues to exceed our expectations. I’m delighted that 83% of SMEs and 77% of the smallest businesses are already on board. We will now write to the minority of employers who are not, to establish how we can help them meet the requirements of reporting in real time.”
