by Nick Robinson | Apr 09, 2013 | Personal Tax
From last weekend, the biggest alteration to the PAYE system since 1944 will be in effect. Real Time Information, or RTI, was introduced from the 6 April and will affect all businesses who pay their employees through the PAYE system.
Whereas before the information was sent off to HMRC in an end of year report, businesses will now be required to submit it every month after their employees have been paid. The system relies on businesses having connected themselves to the Government Gateway so that the reports are submitted electronically and automatically.
There has been plenty of debate about the idea, but HMRC say that it should make business owner’s lives much easier along with increasing the accuracy of the information submitted. The only problem is that a lot of SMEs are unprepared for the change which will cause problems.
Whether or not the system will hold is yet to be seen, but if it does crash it will cause headaches all round, for businesses and HMRC alike. If people do not submit their info then they will be liable for fines, but the Government has attempted to allay any fears about businesses being hit with crushing fees.
For the first year, there will be no fines. As long as everything is in by April 2014 HMRC will be happy to let you off any delays or mistakes, but post that fines will come thick and fast if you fail to keep HMRC updated on your employee’s salaries. Hopefully by that point, businesses should have gotten used to the change so that fees will be minimal, especially so with an automated system.
People are still wary though. With many unprepared, it could be a disaster, especially with HMRC’s failure to properly advertise and educate about the change. Hopefully, once the new system has got on its feet, it won’t take long for companies to get everything sorted out, but it might take some time. It’s very likely HMRC’s phones will be very busy for some time to come.
If you need any advice or help with RTI, please get in touch straight away and we’ll be happy to help.