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HMRC puts the screws to employers over RTI

Her Majesty’s Revenue & Customs has begun to use the hard sell when it comes to the adoption of its new Real Time Information PAYE system in a major way.

In fact, the taxman has begun to seriously pressurise the more than 70,000 employers who have yet to transition to the RTI system through a strongly-worded email informing them that they have until the end of the year before they start earning penalties for their sins. Anyone neglecting to change over will see a bare minimum penalty of £100, but this will increase over time or if the company in question has a large pool of employees.

This can ostensibly affect contractors as well, though joining a PAYE umbrella can help streamline things. A freelancer needs only tell their umbrella to submit weekly or monthly invoices to their clients and the umbrella takes care of income tax and National Insurance deductions for them. 

Still this is just making the whole RTI scheme a thorn in the side for employers, especially at smaller firms that might not have the wherewithal to change their payroll systems to facilitate HMRC’s requirements. And honestly now, the scheme is really just one more salvo fired by the Government against that looming, all-oppressive tax avoidance enemy that is somehow the cause for all of Britain’s ills – or at least if you listen to someone like chancellor George Osborne talk that’s what he’d have us all believe.

Yes, RTI will definitely increase revenue flowing into Treasury coffers and will make it more difficult for tax evasion to occur, so that’s technically an improvement. However more than just a few detractors are saying that this new focus on timely NI and income tax payments is doing nothing but putting the screws to small businesses, despite the fact that they’re the lifeblood of the British economy and the amount of tax revenue that’s going missing from SMEs absolutely pales in comparison to the amount that corporate tax dodgers get away with on an annual basis.

It’s not an income tax problem that’s truly causing Treasury shortfalls, after all – it’s the massive profits multinationals like Google and Amazon make every year but only pay a fraction of their tax responsibility on. Can we please get this problem sorted before we start squeezing the British individual taxpayer even more?

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