HMRC relaxes RTI reporting rules for small firms

19th March 2013

Businesses with less than 50 employees will be able to take advantage of a relaxation in Real Time Information (RTI) reporting rules for the first six months of its inception, HM Revenue & Customs (HMRC) has announced.
HMRC has admitted it recognises that many small employers, who pay employees on a weekly or even more frequently basis, but only process their payroll monthly, may need longer to adapt to the new RTI reporting measures.
Until 5 October 2013, businesses with fewer than 50 employees, who struggle to report every payment to employees at the time of payment, will be allowed to send information to HMRC by the date of their regular payroll run – but no later than the end of the tax month (5th).
The relaxation of reporting rules is a result of heightened pressure from a number of bodies that collectively wrote to Exchequer Secretary to the Treasury, David Gauke, to outline their concerns small businesses faced regarding the new RTI reporting system.
Chas Roy-Chowdhury, head of taxation at the Association of Chartered Certified Accountants, said: "Deferring RTI requirements until October is a sensible approach and it is encouraging that HMRC has listened to the accountancy and payroll sectors’ collective voice on this matter and acted with common sense."
HMRC has confirmed it will continue to work with employer representatives throughout the summer to measure the impact of RTI on the smallest firms.
It will look to assess whether they can make improvements to the system to address SME concerns without compromising the overall benefits of RTI or the success of the Department for Work & Pension’s (DWP) Universal Credit.
However, Mr Roy-Chowdhury believes amendments to Universal Credit regulations are a necessity in order to improve the efficiency of payments on a RTI basis.
"The problem looming on the horizon is how Universal Credit fits into the RTI picture. DWP has failed to consult, engage or understand the massive burdens it expects businesses to carry when designing Universal Credit," he said.
"A change in the Universal Credit regulations is essential to facilitate payments on a RTI basis, yet we have heard little from the department on this matter."
For further information on the impending arrival of Real Time Information reporting next month, read our detailed guide for employers today.

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