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Small firms given extra time to prepare for RTI

Implementation of the new Real Time Information scheme, which was slated to go into effect next month, has been relaxed for firms with less than 50 employees.

Almost everyone has been up in arms about the new RTI scheme, which is on the rails and ready to launch on 6 April, as it will make the lives of businesses just that much more complex by requiring PAYE details to be transmitted electronically to HM Revenue & Customs every time an employee receives a pay cheque. However, in a rare show of compassion from HMRC, the taxman has said that if your business has less than 50 workers you can hold off on complying with RTI for another six months while you jump through the hoops required to set up your payroll system to interface with HMRC servers over the internet.

Lucky small businesses now have until 5 October before having to get with the RTI programme. In the meantime, the taxman says it will take the summer to see how the new PAYE scheme is being handled by larger firms, leaving the door open for more changes to the system; if we’re lucky, perhaps HMRC will bin the whole programme if it turn out to be more trouble than its worth.

The sudden change of heart on the part of what most people usually consider a heartless tax collection entity such as HMRC could be due to the fact that there are serious misgivings about how well the nation’s firms will be able to handle RTI implementation, industry experts say. The Forum of Private Business’ Robert Downes intimated as much in a recent statement concerning the news about the relaxation of the RTI rules for small businesses, but he was quick to add that the taxman’s decision was most likely a pragmatic one, as a full-scale meltdown of the tax system this April is not going to help anyone, including the Government.

Still, there are many concerns that changing the rules so close to the implementation date is likely to just confuse many small firms even more, especially in the face of how a large number of these small businesses have already been scrambling to find a way to prepare for RTI. I have to agree, as there’s nothing more frustrating to be yanked back and forth so quickly; it leaves you completely off-balance and most likely does nothing except increase the per capita alcohol consumption amongst small business owners.

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