A QUARTER of small businesses are still unaware of incoming changes to the way tax filing changes to PAYE.
Real-time information (RTI) is due to come into force from April 2013, and will see companies report changes as and when they occur, instead of at the end of each financial year.
However, just 16% were “fully aware” of RTI, while 25% had never heard of it at all – a poll of 1,700 small businesses by the Federation of Small Businesses (FSB) found.
Approximately two-thirds of respondents are not confident of the success of RTI, while 60% of companies said they had not had any communication from HM Revenue & Customs less than six months before the changes are due to come into force.
A third of bosses said they felt learning new processes to deal with the changes will pose a challenge to their business, while 24% said dealing with potential enquiries from HMRC would also prove difficult.
Last week, experts told a Treasury sub-committee they too hold concerns over the administration of RTI. In particular, worries were raised over the requirement to make submissions on a monthly basis, while “a mismatch” was highlighted between what is expected of taxpayers and the help and guidance they are given by HMRC.
FSB national chairman John Walker said he was concerned RTI could fall flat.
He said: “With only six months until RTI is due to be implemented, the FSB has real concerns that not enough businesses are aware that is just around the corner … We’re concerned that it could flop if government does not step up its game in communicating the changes.
“There are a number of steps that a business must complete before it can provide RTI to HMRC so it is critical that those affected know about it. Of the very small number of firms that are aware of the change, 30% have had to buy new software for their business. HMRC needs to act now so that all small firms can prepare their business as they only have six months in which to do it.
He added: “Without adequate communication and education from government, small firms won’t be able to prepare. It just isn’t fair if they’re then penalised for not complying.”
For their part, an HMRC spokesman said: “We intensified our RTI communication drive a few weeks ago as customer research shows that six months before it starts – in April 2013 – is the best time to engage with employers.
“The campaign includes sending more than 1.4m letters to employers, targeted flyers and emails, advertising, regular live Twitter Q&As, YouTube videos and roadshows across the country. It targets employers of all sizes, payroll bureaux, accountants, professional bodies, software providers and other representatives and industry groups.
“RTI is on track and the pilot is going well. Nearly two million individual records have been successfully reported in real time by more than 1,800 PAYE schemes so far.”
HMRC is continuing to ramp up the number of raids on premises it carries out as part of criminal investigations, searching 761 properties in the last year
The latest opinions from Accountancy Age on Making Tax Digital, and outline plans to evolve the UK's corporate governance regime
Five million taxpayers are ow using digital personal tax accounts (PTA) as part of the making tax digital strategy, HMRC said
Lord Howard Leigh of Hurley discusses the government’s initiatives to mitigate tax avoidance and evasion