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Many small firms sadly unprepared for PAYE changes

Sad news today: it was recently revealed that less than two out of three smaller-sized firms re prepared for the impending PAYE system changes, with the rest not even aware that there are changes coming down the pike.

The new Real Time Information system is going to be implemented in April 2013 whether you’re ready for it or not, with HMRC pushing forward with their pilot. All systems seem go for the integral change to how employers will have to handle PAYE, despite the fact that there are many small-sized firms that fear the changes could make things worse for them.

A recent study, which polled 1,00 SMEs across the length and breadth of the UK, found that almost half of every small business polled admitted to being uneasy about the changes. The main worry that these small firms have is that the taxman is actually going to increase their administrative burden instead of lessening it; only 10 per cent said they were looking at the changes in a positive light.

RTI will lead to employers to begin providing HMRC with real-time updates with National Insurance and PAYE information every time they pay one of their employees. Unfortunately, with the new focus on IR35 enforcement, many contractors may find themselves having to deal with PAYE issues as well, which means that even freelancers have a stake in the new developments slated for next year.

RTI awareness has increased over the last 12 months, according Neilson Watts, the associate product manager for the firm that conducted the survey. However, Mr Watts said that he was still concerned to see such a large percentage of firms still not clear on how RTI will impact their business practices in the very near future.

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