A report issued recently by Sage UK shows that a large number of Small and Medium sized Enterprises were not ready for the introduction of Real Time Information by HM Revenue & Customs. The survey of 1,100 small businesses by Sage’s UK Omnibus revealed that 76 percent had no knowledge of the changes to be implemented.
Since the introduction of Pay As You Earn in 1944, the system has been largely unaltered. As employment, benefit and pension trends have changed considerably over the years, the system has not been as efficient as it once was. The introduction of the Real Time Information will improve efficiency, with employers submitting information each time they pay an employee rather than at the year end. Accuracy will also be improved as the tax deducted will be based on real time information provided by the employer.
Employers will be required to implement changes to deal with the alterations to PAYE in order to keep the impact upon the business to a minimum. Neilson Watts, the Product Manager for People Products at the Small Business division of Sage said:
“Small businesses are faced with a variety of different payroll providers who all offer different levels and standards of support. The new changes are not mandated for providers to include within their software, so it is vital that business owners ensure that the appropriate procedures are put in place.”
PAYE Real Time Information will be piloted from April 2012. All businesses are expected to include relevant changes to their payroll systems from October 2013.
Want to learn more?
Subscribe to our newsletter to get accounting tips like this right to your inbox