RTI Relaxation Extended

Small businesses given further time to report

Last week HMRC extended the relaxation for small businesses (those with fewer than 50 employees) to report payments made to their staff through the new PAYE system.

The original relaxation was announced back in March and was only intended to last until 5th October 2013 and was aimed at small businesses that pay their employees weekly or more frequently but who only run their payroll at the end of the month and therefore find it difficult to report every payment made to their employees at the time of payment. In these circumstances employers 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.

Typically, the number of reports required could be reduced from 52 to 12 in a year.

After listening to stakeholders, HMRC has now decided to extend the temporary reprieve of the new reporting rules until April 2014. At this point however the relaxation will come to an end. The extension means that businesses will not be required to change their approach halfway through the tax year. Employers however will need to plan to be reporting in real time from April 2014.

HMRC will continue to work with businesses to identify whether there are any unusual circumstances that need to be catered for in the longer term.

There are currently 1.4 million employer PAYE schemes reporting in real time since April of this year, meaning that more than 83% of small to medium firms and more than 1 million (77%) micro employers have already started to report PAYE in real time.