REAL-TIME PAYE information (RTI) is a good idea. Generally speaking.
The principle that ‘up-to-date’ PAYE payments will help to smooth out tax anomalies is fine. But how many times have we said this: ‘the devil is in the detail’?
Vince Cable’s business department sends out press releases on a seemingly daily basis about cutting red tape and easing the reporting requirements on small business. But concerns from advisors about the burden RTI will place on SMEs suggests that the government is taking one step forward and two steps back. Perish the thought that BIS and the Treasury aren’t joined up on this initiative.
Today has seen some concession – small businesses will have a week to get staff data across to HM Revenue & Customs.
But, as advisors such as Paul Aplin point out, do we really want a situation where some businesses will now have to collate and send data 52 times a year to HMRC, rather than 12?
HMRC chief executive Lin Homer told the Public Accounts Committee last week that there is no alternative plan for HMRC beyond RTI – besides trying to get ahead of its own schedule.
So while an RTI pilot has been running for a while, it’s definitely coming into force a lot faster than ‘leisurely’.
Concerns remain about the taxman’s ability to deliver the system, while advisors at the sharp end foresee big problems for their clients.
As with the construction industry tax scheme in the mid-noughties, the taxman will have to take on board the growing concerns that more time is needed to make sure this works for everyone.
Put it off a year. HMRC won’t get the same stick for doing so compared to what it would receive if this was to fail.
Kevin Reed is editor of Accountancy Age
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