From its introduction on 6 April this year, RTI has required employers to report the payments and deductions they have made under PAYE on or before the time of payment, rather than at the end of the year.
However, following concerns over the impact of the changes on smaller businesses, HMRC had granted a temporary relaxation of the rules to businesses with fewer than 50 employees, allowing them to report via the new system but on a monthly basis, until 5 October 2013.
HMRC has now further extended this deadline from October 2013 to April 2014, to ensure that smaller businesses do not need to change their approach midway through the tax year.
As with the current exception, employers must still use the new system, but may do so monthly (on the date of their regular payroll, providing it is no later than the fifth of the month), rather than on or before the time of payment.
Paul Aplin of the ICAEW Tax Faculty Technical Committee said, 'Extending the easement makes very good sense and will provide a valuable breathing space for HMRC to engage further on this issue which, if not addressed, will impose extra cost burdens on significant numbers of such businesses.'
HMRC commented that it was 'continuing to work with businesses over the coming months to identify whether there are any specific circumstances with on-or-before reporting that it needs to cater for in the longer term'.
More than 1.4 million employer PAYE schemes are currently reporting in real time, with around 83% of small and medium-sized businesses and 77% of micro businesses now using the new system.
Despite the extended deadline, small businesses are advised to take steps now to ensure that they are fully prepared for the new regime.
For further advice on RTI and meeting your payroll needs, please contact us on 01252 728598 or firstname.lastname@example.org .
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