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HMRC extends monthly RTI respite to 2014

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12th Jun 2013
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HMRC has extended the temporary relaxation of real time information (RTI) reporting rules for small businesses for a further six months to April 2014.

The relaxation applies to businesses with less than 50 employees and was originally set to run until October 2013. 

According to HMRC: 

These transitional arrangements only apply to small employers who pay their staff manually, for example, weekly or fortnightly and then take their records to their payroll provider monthly to process the payroll for the month. These arrangements do not apply to small employers who can run their payrolls weekly or fortnightly and can report payroll information at the time of payment.

In March, HMRC announced the easement after a widespread campaign across the profession and business groups, urging the government to ease the reporting burden on small firms by allowing them to submit payroll data just once a month.

Typically, this can reduce the number of required reports from up to 52 per year to 12.

Affected businesses will now not have to change their reporting approach halfway through the tax year, the Revenue said. 

It added it would work with businesses over the coming months to identify whether there are any specific circumstances with on or before reporting it will need to cater for in the long term.

According to HMRC figures, around one in six payments reported under RTI since the system came in in April 2013 has been made using the relaxation.

In addition, 23% of the smallest employers are yet to report under RTI and may benefit from the relaxation.

Chair of ICAEW tax faculty and AccountingWEB tax editor Rebecca Benneyworth welcomed the announcement. 

“This is the result of some hard work and extended engagement between employer representatives, including professional bodies, and HMRC. Thanks go particularly to Paul Aplin who has been leading for the ICAEW on this. I am also very pleased that although the easement will end in April 2014, HMRC will continue to work with stakeholders to identify the real issues for very small employers.

"The tax faculty will be issuing a call for evidence to members to help with this work, so that suitable adjustments to the on or before rules can be negotiated for 2013/14. As a member of ABAB, I shall also be looking carefully at the compliance costs and cost savings identified by HMRC and testing whether these have been robustly arrived at.”

Chairman of the CIOT’s Employment Taxes Sub-Committee Colin Ben-Nathan, also welcomed the extension, which he said is positive for small businesses. 

“'On or before reporting’ has been a significant concern for small employers. This announcement is good news and shows that HMRC has continued to listen to the concerns of small employers, their agents and the organisations that represent them. It will help small employers continue to engage positively with RTI and to keep the costs of RTI reporting to a minimum," he said. 

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Replies (7)

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David Ross
By davidross
14th Jun 2013 12:01

Haver there been any fines yet?

In all the circumstances I should have thought that HMRC would not issue any penalties until at least this October, to allow us all to 'play our way in'

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Tom McClelland
By TomMcClelland
14th Jun 2013 13:12

Is this the concession that applies to almost no businesses?

I was aware of a 6 month concession that companies that pay their employees weekly but calculate PAYE monthly could report RTI monthly. That concession is totally irrelevant to 99.9% of small businesses, so extending it to a year isn't really much of a concession.

The wording of the article looks quite dangerous. There is an implication there that all small companies need only report 12 times a year under the concession, even if they pay their employees weekly, which simply isn't the case, so far as I am aware. The problem is that over-hyped reporting of concessions makes small employers think that they're "off the hook".

 

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By adrian11
14th Jun 2013 13:59

Once again the devil is in the details

Having just checked HMRC's web site this is what the original concession said:

These transitional arrangements only apply to small employers who pay their staff manually, for example, weekly or fortnightly and then take their records to their payroll provider monthly to process the payroll for the month. These arrangements do not apply to small employers who can run their payrolls weekly or fortnightly and can report payroll information at the time of payment.

(Note - my emphasis)

But that's not what the headline seems to suggest. Does this concession apply to all small employers or just that tiny minority that pay manually? Why is this important point not made clear in the announcement?

And is it a good idea to introduce new regulations and then say, well we don't really want to enforce them yet, but we will next year? Seems to me to be creating more problems for the future than it solves today.

 

 

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By Rachael White
14th Jun 2013 14:01

Thanks for your comments - certainly some valid suggestions. I shall add the above detail to the article.

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By Mallock
14th Jun 2013 14:38

It is surely common sense that a once a month FPS (which must be made by the end of each tax month) submission would give HMRC all the information they require at the time they require it and it would save small employers a massive amount of work and headache.

I don't see how receiving an FPS several times a month gives HMRC information that they can work with or act on any more quickly than a monthly submission allows.

The requirement to submit an FPS before every payment is made was obviously thought up by someone without any practical experience who sits in an office without windows or doors. It is an unworkeable requirement for small businesses with part time staff and those who work irregular hours or days.

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By Old Greying Accountant
14th Jun 2013 15:19

It is not HMRC ...

... it is DWP that want it, they are obviously not going to be ready for in October!

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By SXGuy
14th Jun 2013 15:26

Sitting on the fence

While i agree that weekly FPS submissions can be a burden to small business for various reasons, lets not forget that you can submit FPS in advance.

The only requirement is that an FPS submission must be made on or before the following pay date.

So employers who pay thier staff a fixed weekly wage can submit 4 or 5 FPS submissions in 1 hit, once a month.

This of course doesnt help those who are paid a varied salary each week, which is why i sit on the fence regarding it.

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