Is your SME RTI ready?

IN: Business news

Describing it as the "single biggest innovation in the administration of the tax system since PAYE was brought in after the Second World War", it seems exchequer secretary to the Treasury David Gauke is excited about the incoming Real Time Information (RTI) system.

undefinedFor small and medium-sized enterprises (SMEs), this is a major change in payroll procedures set to come in effect from April, so it is paramount businesses are aware of what HM Revenue and Customs (HMRC) has in store for them over the coming months.

Effectively, SMEs will be required to report pay-as-you-earn (PAYE) in real-time so that information on all payments is submitted to the tax office online as and when it happens as part of the payroll process, rather than at the end of the year.

According to Mr Gauke, this will make it easier to make adjustments when employees join or leave a firm and will enable any payment issues to be resolved more efficiently.

He said: "The majority of the pilot employers questioned expect a reduced burden when the end of year is taken into account. And they have told HMRC they see clear advantages in increased accuracy and simplicity - especially around starters and leavers." 

Still, as with any new system, there are important changes organisations have to implement in order to comply, including ensuring they have the right tools on hand to provide real-time data to the tax office.

As such, HMRC is urging businesses to update or acquire software (some of which is free), or use a payroll provider, to ensure they are prepared for the roll out of RTI in three months' time. 

Not only that, but it is vital firms have the most up-to-date information on their staff, including the correct basics like name, date of birth and national insurance numbers, with all businesses expected to be fully compliant by October. 

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