Small businesses are being urged to prepare now to cope with the biggest change to the PAYE system in nearly 70 years ago by a Boston-based account.
From April the Government will be introducing a ‘Real Time Information’ (RTI) demand on employers.
That change means they must report their employees’ gross pay, tax, National Insurance contributions and other deductions when or before salaries are paid, so in most cases weekly or monthly.
Currently most employers only provide that information annually.
Tracie Lee, who runs TaxAssist Accountants in Boston, said: “This major change is only weeks away now and for many small business owners it is going to be yet another administrative burden at a time when they’re trying to focus all their resources on serving existing and winning new customers.
“Business owners who look after their own PAYE reporting or use professional advisers, need to urgently ensure that plans are in place to introduce new systems needed for collecting and updating employee information.”
The new RTI rules will be phased in from April this year and become mandatory by October. From April 2014 penalties will be introduced for non-compliance.
A survey issued by TaxAssist Accountants and All Party Parliamentary Taxation Group last year, found that 64 per cent of employers were not aware of the deadline for the PAYE changes.