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Will contractor accountants pilot Real Time Information?

Will contractor accountants pilot Real Time Information?

Accountants may want to encourage their clients to take part in HMRC’s pilot of the real time information initiative.

So far, only 300 businesses have agreed to take part in the initial pilot starting next April. The employers who take part will need to file their PAYE returns online each time they pay their employees. Real Time reporting will become compulsory in October 2013.

HMRC wants another 1,300 companies to take part in the initial pilot and a further 250,000 employers to join the scheme in November 2012 after the findings of the initial pilot have been assessed.

Stephen Banyard, who is currently acting director general for personal tax at the Revenue, said increasing the number of companies taking part in the pilot will ensure RTI is implemented smoothly. Although it may seem to be an ambitious target, it is achievable because we know RTI is still on track.

HMRC has considered all possible issues, including practical and technical ones, and the department is confident that it has the capacity to increase the pilot by more than 300% by next July, he added.

The Government says businesses will save £300 million in 2014-15 because they will no longer need to submit P45s and P46s. The Exchequer will also save around £395 million that year because it will be receiving more accurate data. But, businesses will probably face one-off costs during implementation. For example, RTI will run in conjunction with the BACS computerised payment system, so all companies will need to process their payroll online.

Small businesses in particular may find the transition period both difficult and costly!

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Image: Speed of Light by tobias.munich

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