This April there’s a rather weighty change to employee payroll on the horizon in the form of Real Time Information (or RTI). This new scheme from HMRC mandates that all PAYE payroll schemes must now be reported to the taxman on or before every pay day, rather than annually. This means HMRC will always hold up-to-date information on all salaried employees in the UK. An admirable aim, certainly, however many specifics about the scheme are still unknown. HMRC have even delayed their RTI-related penalties by a year in response to claims the scheme is being introduced too rapidly.
Now, with two months to go until RTI becomes mandatory for all freelancers, contractors and SMEs (except Sole Traders, you lucky bunch), research by our parent company Crunch has revealed that a paltry 19% of small businesses are aware of the upcoming changes.
Worryingly, more than double that amount (46%) reported that they “have no knowledge” of RTI, and only slightly fewer businesses (35%) claim a “vague” awareness of the forthcoming legislation.
Crunch’s Steve Crouch said:
“These new stats clearly show that despite HMRC’s claims that their communications campaign for RTI is on track, there’s still not enough information from the Government about this huge change to the payroll system.
“There’s still time to get organised, but small businesses should start planning now. Small and medium-sized businesses need to be fully RTI compliant by April 2013, so talk to your payroll provider if you’re unsure or if they haven’t yet informed you about changes.”
For limited company freelancers, RTI promises to be an unwelcome and troublesome burden – especially for those that look after their own books. Freelancers who outsource their accounting duties may not be spared RTI-related inconvenience either; a recent poll by IRIS found that two thirds of accountants are planning to increase their fees to mop up their RTI-related expenses.
Photo by Sodanie Chea