As the launch of Real Time Information draws near, research from KPMG reveals employers are not prepared for the new system, leaving planning to the very last minute. According to KPMG, businesses should be planning the changes required to cope with the new system. Real Time Information has been introduced by HM Revenue & Customs to bring taxation into the 21st century, ensuring accuracy of tax bills as employers submit information each time an employee or pensioner is paid. However, together with the gradual introduction of pension auto enrolment, KPMG fears that a number of businesses are leaving preparations too late.
The first employers, including HMRC, will switch to RTI from April 2012, with other employers being phased in between April and October 2013. The Real Time Information system will also support the introduction of Universal Credits. The current arrangements for payroll systems will need to be altered in a number of cases, possibly leading to additional costs incurred.
KPMG conducted a survey of 70 businesses, finding that two thirds haven’t even considered plans to adopt the RTI system, while 18 percent have no awareness of the changes or deadlines. However, 34 percent had significant concerns about the new system. The current payroll is most likely to cause problems, according to KPMG, with over half the businesses surveyed having two PAYE schemes.
Businesses which are yet to plan for the implementation of RTI should approach their small business accountant as soon as possible for advice and a payroll solution.
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