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RTI: ‘on or before’ easement extended for micro-employers

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Existing employers with nine or fewer employees will be able to report PAYE information on or before the last pay day in the tax month until April 2016. This is narrower than the current relaxation, which comes to an end in April 2014, and applies to businesses with fewer than 50 employees. The announcement is in recognition that a small number of micro-employers and their agents need more time to adapt to RTI.

All employers starting to operate PAYE after 6 April 2014, as well as existing ones with ten or more employees, will need to report each time they pay their staff from April 2014. HMRC has published a report setting out the results of discussions held with businesses to examine the impact of the ‘on or before’ rule.

Paul Aplin, the chairman of the ICAEW Tax Faculty Technical Committee, said: ‘The existing RTI “on or before” easement for employers with 49 or fewer employees relieved many small businesses of the extra cost burden of complying with the “on or before” rule. I would have liked to see that easement made permanent, but ministers made it very clear that it would end next April. The new extension to April 2016 for micro-businesses eases the burden for over 85% of employers, and that has to be a very welcome move.

‘The results of the survey conducted over the summer by HMRC show very clearly that only a handful of employers and agents believe that RTI has reduced or will reduce their compliance costs. It would be sensible to conduct another survey next year to assess whether that view of the RTI admin burden changes with experience.’

Issue: 1197
Categories: News , Employment taxes