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HMRC relaxes RTI ‘on or before’ rule for small businesses

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HMRC has agreed a relaxation of reporting requirements for small businesses under the new PAYE real time information (RTI) regime.

‘HMRC recognise that some small employers who pay employees weekly, or more frequently, but only process their payroll monthly may need longer to adapt to reporting PAYE information in real time,’ the department said.

‘Until 5 October 2013, employers with fewer than 50 employees, who find it difficult to report every payment to employees at the time of payment, may send information to HMRC by the date of their regular payroll run but no later than the end of the tax month (5th).’

HMRC guidance includes a table setting out ‘situations where employers will not have to report PAYE information “on or before” the time they pay their employee’.

Paul Aplin, chairman of the ICAEW Tax Faculty’s technical committee, told Tax Journal: ‘This will come as a  relief to smaller employers who run monthly payrolls but who pay more frequently and who were faced with the prospect of weekly or even more frequent reporting under RTI. It is a welcome recognition of the reality of the situation and avoids the imposition of an extra burden on the smallest businesses. Now we have to secure a workable solution to take effect from October.’

CIOT president Patrick Stevens said the relaxation demonstrated that the government had listened to the concerns of ‘employers, their agents and the organisations that represent them’. It followed ‘constructive dialogue’ between numerous professional and trade bodies and was ‘the culmination of many discussions that we have had over a number of months with various ministers, other MPs and peers, and officials’.

HMRC said it would continue to work with employer representatives during the summer to assess and understand the impact of RTI on the smallest businesses.