Small employers are set to benefit from the extension of an RTI reporting easement that will now run until spring next year.
Companies with fewer than 50 staff are still required to report PAYE through the RTI system, but will be able to do so just once a month until April 2014, rather than each time they pay their staff. This relaxation of the rules was originally set to expire in October.
HMRC’s director general for personal tax, Ruth Owen, said: “The roll-out continues to exceed our expectations. We will now write to the minority of employers who are not on board, to establish how we can help them meet the requirements of reporting in real time.”
And Treasury secretary, David Gauke said: “The Department for Work and Pensions is already using the new system to underpin its Universal Credit pilot, helping it to be more responsive to changes in claimants’ income levels. This is all good news, but we will continue to listen to and work with businesses to ensure that all employers are reporting in real time by April 2014.”
John Allan, national chairman, Federation of Small Businesses, said: “Reporting payroll in real time is a big change for small firms, so it is good to see that many have stepped up to the challenge and are doing it. There is no doubt that it adds another administrative burden for business owners and in some cases additional costs as firms outsource their payroll.
“For those who want to manage it in-house it is good news that the temporary relaxation, which allows small firms to report once a month has been extended. We would like this to be made permanent so that after
April next year, when a business can be fined for reporting late, the smallest firms are not put under undue pressure.”
More than 1.4m employer PAYE schemes are now reporting to HMRC in real time since its launch in April, meaning that 83% of SMEs and more than 1m (77%) micro-employers have already begun filing.
Information for approximately 44.5m payments made to employees for the month until May has been passed to the Revenue.
HMRC says it will identify whether there are any unusual circumstances it needs to cater for in the longer term, but employers of all sizes need to plan to be reporting RTI from April 2014.