SMEs coerced with online filing carrot
The Inland Revenue has promised to pay smaller employers a tax-free lump sum of £825 if they file their end of year tax returns online.
From May 2004 large employers must start paying tax and other deductions electronically. And while smaller companies will not have to follow suit until much later, the Revenue wants to encourage early adoption.
The incentive will start with the 2004/05 end of year returns and will run over five years. The Revenue is writing to 1,6 million employers from today to inform them of what company size bracket they fall in, and hence when they need to start filing electronically.
Large employers are those that have 250 or more staff, medium employers will have between 50 and 249, and small employers less than 50. Medium sized employers must file electronically by May 2006.