HMRC IS GATHERING EVIDENCE on the effect of easing small businesses’ real-time PAYE reporting requirements.
The taxman has launched an online survey to find out how employers are coping with being foced to report PAYE information ‘on or before’ the date employees are paid and to decide whether the rules need to be changed.
Real-time reporting sees PAYE reported on or before the date payment is made, while changes will be reported as and when they occur, rather than at the end of the financial year.
“This is a chance for employers and agents to have their say, so we are strongly encouraging them to complete the survey, which should only take ten minutes to do,” a HMRC spokesperson said.
The system, which commenced in April, has been subject to criticism from stakeholders and institutes because of the “practical problems” it could pose for small businesses.
Allowances were made for businesses with fewer than 50 employees, permitting them to continue reporting their payrolls monthly until 5 October while they prepare, free of the threat of penalties.
That deadline was pushed back until April next year, meaning “businesses will not be required to change their approach halfway through the tax year”, HM Revenue & Customs said.
Ministers are now considering what, if anything, needs to be done beyond that date and the survey could help inform any decision they come to.
AC Mole & Sons partner and ICAEW tax faculty chairman Paul Aplin said: “The on-or-before rule is a significant practical problem for many small businesses. The current easement for those with fewer than 50 employees ends next April. Ministers are considering what should happen after that and I would urge anyone who has or anticipates difficulty coping with the on or before rule to complete the HMRC survey. This is the best – perhaps the only – opportunity to get your views across.”
Seperately, HMRC noted that a “very small number” of student loan borrowers’ employments have been incorrectly ceased on its PAYE system.
As a result, HMRC’s systems have automatically informed the Student Loans Company (SLC) that those individuals had left their employment.
The SLC has issued letters to those borrowers, querying their employment status. Employees affected by this issue are being asked to respond to the SLC saying they have not ceased or changed employer.
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