A Midland accountant has welcomed a move by the taxman to tone down a controversial scheme which controls how employers record their payments to staff.
In April this year, HMRC laid down new rules which saw thousands of Midland businesses using the new PAYE Real Time Information (RTI) process – a system which means firms must send electronic details of staff as soon as salaries are paid to employees.
It aims to give £7.5 billion of savings each year and cut down on benefit fraud. The new system, which brings with it hefty fines for misuse, has proved difficult for small businesses which don’t have the administration resources to file weekly returns.
However, as part of a Whitehall u-turn, the reporting format has now been extended to allow firms to report monthly rather than weekly up until 5 April 2014.
The move has been welcomed by Bewdley-based tax expert Anita Stewart, partner at dhjh Chartered Accountants, who says it will make things ‘remarkably easier’ for small businesses who are rightly concentrating on making the most of the economy’s recent upturn.
“So many of the region’s SMEs we have been helping in the past six months have been running into problems because they cannot operate their payroll in line with RTI requirements. It wasn’t because they didn’t want to comply, but it is simply because they are concentrating on boosting their trade.” said Ms Stewart.
“HMRC has taken the pressure off many small firms by relaxing the reporting format from weekly to monthly. I know it has been welcomed by countless small businesses, especially those who employ part-time and flexi-staff, which were faced with different weekly scenarios and were panicking.”
Ms Stewart was however keen to stress that the deadline extension does not mean firms in the region should take their ‘eye off the ball’.
She added: “The extension has made things remarkably easier for small businesses here in the West Midlands.”