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Requests for annual RTI registration overwhelm HMRC

As early as the first week into the launch of Real Time Information, complaints have been abound into HMRC. From pilot companies switching to RTI delaying pension payments to month end to changing phone numbers to 03 STD codes from 0845, this switch-over has been bemoaned by all.

However, for smaller businesses and contractors’ payroll agents, there has been a work around – until now.

There has been the option to register for the annual scheme. Which means that if you pay your employees – or yourself – annually, you only have to tell HMRC which month of the year you’ll be issuing salary and report RTI then.

For the remainder of the year, rather than submit a Nil EPS form every month, you have to do nothing other than not pay anyone.

The administrative burden of RTI for small businesses, the sticking point turning so many to favour the annual scheme and a once-a-year FPS, would subsequently be shrunk to no larger workload than the traditional P60.

If you do make a payment outside of the month you’ve committed to for the annual scheme, you automatically go back onto the monthly scheme

HMRC: wait for a “What’s new” update for annual RTI registration

The problem has been that so many small businesses have opted for the annual scheme that HMRC cannot register the forms quickly enough.

SJD Accountancy, who serve many contractors by looking after their tax planning and self assessment, is believed to have submitted annual payment registrations for RTI for thousands of freelancers on its books.

As a result of so many following suit, HMRC has posted a bulletin on its website today advising that it is temporarily unable to process any further requests indefinitely.

That goes for employers registering for the first time or small businesses looking to change their existing Real Time Information payroll reporting to once a year.

The whole scenario is an indictment of the HMRC and its devil may care attitude to implementing such widespread schemes without taking small business into account.

It’s either leap big or not at all

True, we can understand the need to enter into pacts with EU nations for fuller tax disclosure.

However, to impose RTI on small businesses, struggling to cope with the demands of recession as it is, by having them report to HMRC every single time they pay any staff they engage could undermine their profitability and make them think twice about even going into business in the first place.

The system certainly doesn’t encourage contractors who may have dreams of steady expansion to willingly invite so much more non-productive work on themselves.

This underlying reaction will not only deter many freelancers from doing anything more than looking after number one, but also nip any chances of enhanced productivity in the bud before they have chance to take root.

The advice from HMRC is to follow their bulletin board and wait for a “What’s new” announcement before seeking to register for annual RTI. In the meantime, continue to submit NIL EPS forms until any registration has been officially accepted.

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