Most UK employers are now required to report their information on wages and deductions under the Pay as you Earn (PAYE) scheme in real time. The UK tax authority HMRC announced last week that more than 680,000 employers have begun reporting PAYE in real time. There have however been some problems with the system, with some employers reporting that they were unable to open a 2013/14 payroll for RTI until the 2012/13 was finalized.
There is a concession for the smallest employers who have been given more time to prepare for real time information (RTI) reporting. Until 5 October 2013 businesses with less than fifty employees only need to report the payroll information by the date of their regular payroll run, although they must report at least on a monthly basis. HMRC is working with these small employers to see if improvements can be made to the system that will resolve their concerns over the operation of the scheme.
There is however some confusion over the scope of the concession made to small businesses. Some tax advisers have reported that HMRC is only extending the concession of monthly reporting to small employers who perform their payroll computations manually and that the concession is not available to those using computer systems. It has also been suggested that the rules surrounding the new Universal Credit that is being introduced to replace some previous tax credit systems will need to be modified before small employers can cope adequately with RTI.
