RTI Relaxation: Update

Employers reminded they must still report PAYE in real time

Following on from last week’s news that HMRC had agreed a relaxation of reporting arrangements for small businesses, the Revenue has now released more information about this.

Up until 5th October 2013, employers with fewer than 50 employees and who find it difficult to report every payment made to their employees at the time of payment, may send information to HMRC by the date of their regular payroll but no later than the end of the tax month, i.e. 5th April.

This is only a temporary relaxation however and does not relieve employers of their obligations to report PAYE in real time and HMRC still expect most employers to be reporting PAYE in real time from their first pay day on or after 6th April.

The six monthly reprieve is aimed at small businesses that pay their employees weekly or more frequently but who only run their payroll at the end of the month. During this time businesses will be expected to adapt their processes or alter their arrangements with their payroll service provider so that they can become fully compliant.

During the summer HMRC will continue to work with employer representatives to assess and understand the impact of RTI on the smallest businesses and consider whether they can make improvements to RTI.

Employers using commercial payroll software will find that the software is designed to submit their PAYE information as part of their integrated payroll processes, so they should continue to start or report on or before each payment is made to their employees as this will be the simplest and quickest way of operating their payroll.

Software developers have been told that they do not need to change their products during the relaxation period.

HMRC are recommending that employers and agents move to RTI as soon as possible in order to iron out any problems before the introduction of automatic penalties.