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New PAYE reporting scheme will be ‘impossible’, firms say

According to local chartered accountants, many firms have come forward to protest how the new PAYE Real Time Information scheme will be  ‘impossible’ for them.

The burdens the new RTI scheme, which is on track to be implemented next April and will require employers to send tax information electronically to Her Majesty’s Revenue & Customs every time an employee receives a pay cheque, will be nigh insurmountable for many smaller firms, accountants warn.  These companies are going to be hard pressed to remain in compliance with these requirements, which have been categorised by critics as highly unrealistic on the part of the taxman.

The Humberside And District Society of Chartered Accountants’ president, John Gilleard, commented on the impending PAYE system, remarking that the impact RTI will have on smaller firms is quite concerning, especially since it is small and medium-sized businesses that drive economic recovery in the UK. However, the protests have fallen on deaf ears, and while HMRC is currently paid either quarterly or monthly under current PAYE rules, now the taxman will collect National Insurance Contributions and Income Tax simultaneously with workers receiving their pay via an electronic return, and if these new electronic payments are not made either before or the same day employees receive their payments, their employers may be subject to rather steep fixed penalties as a result.

The RTI system, which is currently undergoing a pilot scheme, shows no signs of slowing down or being postponed, leaving SMEs with roughly four months to prepare themselves. This includes upgrading their payroll software in order to comply with the new scheme.

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