Unsure about RTI?

A quarter of small firms have no idea that the biggest shake-up to PAYE in 60 years will kick in just six months time.

That’s the shock finding from a Federation of Small Businesses' (FSB) survey, which blames the staggering knowledge gap on poor government communication.

A snap poll of 1,700 small firms found that just 16% of respondents were fully aware of the ‘Real Time Information' (RTI) programme - a new way of reporting payroll – and shockingly, a quarter (25%) had never heard of it, despite it being critical to the success of Universal Credit.

HMRC’s new RTI programme will gather regular information about employees and aims to dramatically simplify reporting new starters and leavers and make the payroll process easier. It will also support the payment of Universal Credits. However, some two thirds (66%) of respondents to the survey say they are not confident RTI will meet its goals.

And with less than six months to go until businesses have to comply with the new rules in April 2013, more than 60% of firms say they have not had any communication from HMRC about the changes.

Businesses think that learning new processes (33%) to deal with the changes as well as dealing with potential enquiries and inspections from HMRC (24%) will pose a challenge to their business.

FSB chairman, John Walker, said:

‘With only six months until RTI is due to be implemented, the FSB has real concerns that not enough businesses are aware that is just around the corner. This system is linked to the Government's flagship Universal Credit scheme and we're concerned that it could flop if Government does not step up its game in communicating the changes.’

‘Of the very small number of firms that are aware of the change, 30% have had to buy new software for their business. HMRC needs to act now so that all small firms can prepare their business as they only have six months in which to do it.’

‘Without adequate communication and education from Government, small firms won't be able to prepare. It just isn't fair if they're then penalised for not complying.’