MORE THAN A THIRD of SMEs are paying too much to implement tax reforms according to research by HW Fisher & Company.
Of the SMEs surveyed, 15% are forking out between 6% – 10% of their wage bill on implementing the new real time information (RTI) system, with 8% spending between 11% – 15%. However, 61% said the cost of implementing the system was modest, at less than 5% of their wage bills.
Under RTI, all businesses must now make PAYE and national insurance submissions to HMRC each time they pay staff, rather than an annual return. HMRC claims these reforms make it easier for businesses to pay the right amount helping to make the systems more efficient and cheaper.
Unfortunately many SMEs disagree with a third of those surveyed claiming the reforms were needless while nearly quarter said RTI was frustrating.
Nearly half (46%) said they had encountered hitches or that they were still getting to grips with the move to RTI, with a further 31% claiming the transition is difficult.
Although HMRC claims the system will be cheaper and more effective, 39% of respondents felt it had added a cost burden to their business with more than a fifth 23% also claiming adjusting to the system had been time consuming.
Just less than a third (31%) were outsourcing RTI to a third party provider.
Toby Ryland, a partner at HW Fisher & Company said: “It’s clear from our research that the move to RTI has caused many small businesses difficulties, during a time when they would have preferred to have been fully focused on the very tough trading environment faced by most firms.
HW Fisher & Company polled 2,000 SMEs in August 2013.
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