MPs concerned about RTI filing exemption

MPs have raised concerns about farmers’ exemption from a new requirement to file RTI.

From April 2013, most employers will have to send information about tax and national insurance they deduct from employees’ wages to HMRC when they are made, rather than at the end of the tax year as happens now.

The current system causes overpayments and underpayments of tax because some information is out of date.

In a Public Accounts Committee (PAC) hearing earlier this month on HMRC’s efforts to reduce corporate tax evasion and “aggressive” tax avoidance, the committee’s chair Margaret Hodge said they "did not find it reassuring" that people running agricultural businesses would only have to file RTI every seven days. 

HMRC chief executive Lin Homer said the nature of farming was day-to-day and for example, farms may need to hire varying amounts of people from one day to the next. 

"We're keen to understand their reservations and try distinguish these types of organisations and help them," she said. 

Although there has been broad support for modernising the PAYE system, experts have said that the timescale for introducing real-time PAYE is unachievable.

A recent survey found that a quarter of small companies are unaware of the requirement to file real-time PAYE.

Technology may also be a problem, as as some payroll software houses are still preparing their products to support RTI.