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RTI: Last minute marketing tips

21st Feb 2013
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The advent of real time information (RTI) for PAYE is stirring up a 'fight or flight' response within the accountancy profession.

Since the decision was taken to roll out RTI from April, the preparations have been causing technological, logistical and business disruptions for businesses and their advisers. But it doesn’t always have to be doom and gloom, especially not for accountants.

The new PAYE regime has the potential to bring in new clients, in addition to extra payroll work from existing ones.

This article presents a range of planning points to consider when offering RTI-compatible payroll services to new and existing clients.

Managing/communicating with clients

HMRC set the ball rolling this month with final notification letters to many business, so important for practitioners to contact them too. How many of your clients are RTI ready at this stage?

If you don't know the answer yet, start doing so now to identify which ones need your help most. 

If you’re already providing payroll services to clients, how you manage them will change from 6 April onward. New procedures and deadlines will need to be agreed, with an updated engagement letter needed to confirm who is responsible for each task.

Employers and not professional advisers are liable for any penalties, so it's vital to brief clients about the risks of potential charges if submit late or inaccurate returns.

While there will be no late filing penalties (apart from the final submission of the year), RTI’s penalty regime is being amended in Finance Bill 2013. Rebecca Benneyworth is already warning about "vicious" penalties that will arise from next year, so make sure you and your clients are up-to-date on the latest changes.

According to the AIA, in spite of the “soft landing approach” for this year, “There can be no soft landing to penalties of up to £100 per month with a maximum of £3,000. At one point, HMRC suggests this cap could be as high as £10,000,” AIA representative Clive Johnston said.

Offering clients checklists catering for their different situations and awareness levels is certainly feasible in the time left before RTI goes fully live.

For tech-savvy accountants, social media may also be a great way of communicating the change with clients and flagging up news and updates from HMRC.

Emphasise data quality

When checking clients' preparedness for RTI, the biggest risk will be that their data is not up to HMRC's data quality standard.

The existing PAYE system and its annual reconicilations has allowed all sorts of garbage to pile up in both employers' and HMRC's computers - and we know what comes out as a result. Typically, the vast majority of data problems relate to simple errors and omissions such as incorrect names, dates of birth or national insurance numbers. Push clients to test their data using HMRC or software suppliers' tools - or conduct the review and correction process yourself - if you've got the spare resource.

AccountingWEB member Zeofiles sens out a list of all the details the firm currently holds for clients' employees and asked them to confirm the details. The message also asks them to confirm the usual/contracted hours that are requied in RTI submissions.

"Unsurprisingly, most clients either have ignored this or not completed it properly and therefore we need to make follow up calls." It may well be that the firm will have to charge extra to complete one off set-up - see below for other pricing considerations.

Managing the RTI workflow

Resourcing is likely to be the biggest problem for accountancy firms that take on extra work on the back of RTI, according to Rebecca Benneyworth.

"If you take on 40 new clients with monthly payrolls and deliver at the end of the month, you will run into problems," she warned. Instead, she suggested staggering payroll new payroll clients with half processed at the end of the month and the other half run on the 15th.

"You can still run them on the 15th and pay at the end of the month and it's a good way to manage peaks and troughs in your payroll workload,"  she said.

Having the right tools for the job is half the job in itself, she added. 

"If you're going to charge fees for a service, you really should buy a professional program to manage it." 

Pricing strategies

"RTI is a great opportunity for expanding your client base - if you get the pricing right," said Rebecca Benneyworth.

“If you are getting into RTI as a completely new service, it’s easy to misjudge the all the toing and froing involved in getting client information," she added.

This is particularly acute for those irritating cases where director's wages are relatively low, but filing is still required because they're part of a payroll scheme involving employees paid over the lower earnings limit.

This was the subject of considerable debate in Any Answers recently. JCresswelltax commented that if RTI is supposed to simplify things, accountants are going to have a hard time convincing clients to pay more.

Zeofiles saw no problem and will continue charging directors the standard rate for their payrolls: "In most cases this will equate to no more than the amount we used to charge for the P35," Zeofiles commented.

Having the right tools for the job, robust managerial processes in place and a clear idea of which clients you are targeting hold the key to using RTI to generate new busienss.

Start-up companies, for example, are a good target as they have a fresh slate when it comes to payroll, making it easier to train them in the correct procedures to follow.

With barely a month to go before they have to comply, disorganised companies with poor PAYE records and little awareness of their RTI responsibilities could be another lucrative prospect group - if you've got the patience and resources.

But if you can take the PAYE burden off their shoulders and get them compliant in time, there may be other issues with their tax and accounts that you could take on.

Further reading


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