A report from the Public Accounts Committee, released on the 12th January 2012, calls for HM Revenue & Customs to provide clarification of the effect of Real Time Information on SMEs and other bodies without electronic payroll. Real Time Information is under development by HMRC in support of universal credit. Small businesses and SMEs may not be able to access to electronic payroll systems, which could affect tax credits.

As problems with tax credits have occurred on past occasions, the report produced by the Public Accounts Committee calls for an approach which can be developed for those businesses which fall outside RTI. The report also calls for simplification of benefits, with just one department responsible for all benefits, whether they are means-tested or not. Currently, there are 30 types of benefit in England, which are administered by nine departments.

Chair of the PAC, Margaret Hodge said:

“People claiming multiple benefits, such as housing benefit and child tax credit, deal with different public bodies. This can be confusing and potentially discourage legitimate applications. Departments responsible for means testing must work together to get a better understanding of the burdens placed on claimants.”

According to the Department for Work and Pensions, theUniversal credit claims system will be simple for claimants to use. However, the Tell Us Once project which aimed at making it possible for individuals to inform just one agency of any changes in circumstances rather than having to contact several, is now only to be available for notification of the death of a claimant. The project will not be available in other areas.

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Gary Fields

Content Writer working alongside our expert accountants to bring you the latest Tax and Accounting news.

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