Real Time Information (RTI) – Half of small businesses never heard of it !
46pc of companies have never heard of the new system for paying over PAYE , which is called Real Time Information (RTI), a survey conducted by Crunch Accounting found.
RTI means that employers must send information to HM Revenue & Customs every month on how much each employee has been paid and how much tax has been deducted under the PAYE system.
One in three companies said they were only “vaguely aware” of RTI, while 81pc admitted to being unprepared for it.
These statistics are worrying and show just how unprepared small businesses are. They will need to invest in new payroll software or ensure that any outside provider of payroll services are compliant. Fines will start in 2014. What is more under reporting in order to save cash in the hope that they will be able to afford any adjustment at the end of the year will no longer be an option. A recent article in the Telegraph highlighted the fact that RTI may tip struggling companies over the edge
HMRC says that RTI will provide a much needed update for PAYE. However, it should be remembered that the system is designed to work with the Universal Credit that will be brought in by the government later in the year. For universal credit to work properly it will need to be in sync with RTI so that benefits can be accurately assessed and paid on time.
If your business is behind on PAYE now would be a good time to address it before you get embroiled in trying to implement RTI.