TaxAdministrationLeader: RTI’s burden hangs over SMEs and advisers

Leader: RTI's burden hangs over SMEs and advisers

Cutting red tape and introducing RTI are policies that just don't fit together, says Kevin Reed

Leader: RTI’s burden hangs over SMEs and advisers

WE SHOULD BE thankful that at least the smallest businesses – and their advisers – will be spared dealing with real-time PAYE at its most onerous for another couple of years, following the extended easement of the RTI regime until April 2016.

Whether we should be thankful to the government for this easement, well, I think it’s more about being grateful for the endeavours and diplomatic skills of a select few tax and business representatives that helped persuade that the extension was a necessity.

Of course, it might have been something to do with the wide-ranging survey undertaken on HMRC’s behalf, which showed thousands of small business and advisers bemoaning the impact of RTI upon them: at best, its impact was neutral, often it had been a pain in the behind.

So three years after the gaining of power by the coalition government, a ‘business friendly’ government, we breathe a sigh of relief that more red tape has been fended off – for the time being. What began with the promise of tax certainty and less red tape, which included the introduction of the Office of Tax Simplification, has proved to be empty.

The office has tinkered around the edges of the tax regime, with its goal of merging income tax and NI too risky politically for this government (as with the many previous incumbents). In fairness, the government’s tax tinkering at least saves the tax tomes being completely re-written every year. Yet these tomes are still getting longer, not shorter.

The government’s stance on dealing with tax avoidance seems incoherent, with tax arbitrage a key plank of its policy on actually encouraging corporates” investment juxtaposed with grand proclamations made against business and the tax community.

Cash accounting has been threatened by the Department of Business, a move that looks like removing red tape but would merely create change and, therefore, confusion.

National insurance and business rate reliefs are welcome, but there’s no great giveaway. More needed to be done to encourage big business to spend all that loose change rattling around in their pockets.

Could things be worse? Yes, but the SMEs struggling with RTI deserve more. For a government that was committed to easing red tape it has effectively failed, in one fell swoop – with adviers often left to pick up the unbillable pieces.

Kevin Reed is editor of both Accountancy Age and Financial Director

Related Articles

UK votes to leave EU – accountancy profession reacts

Accounting Firms UK votes to leave EU – accountancy profession reacts

1y Fraser Simpson, Reporter
‘Significant recovery’ for HMRC customer service, claims boss Thompson

Administration ‘Significant recovery’ for HMRC customer service, claims boss Thompson

1y Fraser Simpson, Reporter
HRMC loses £653,000 tax battle following administration error

Administration HRMC loses £653,000 tax battle following administration error

1y Fraser Simpson, Reporter
HMRC taskforces raise £540m since launch

Administration HMRC taskforces raise £540m since launch

1y Richard Crump, Writer
Government should rethink “digitally distracted” HMRC, ATT urges

Administration Government should rethink “digitally distracted” HMRC, ATT urges

1y Fraser Simpson, Reporter
European inquiry into Panama Papers receives go-ahead

Administration European inquiry into Panama Papers receives go-ahead

1y Fraser Simpson, Reporter
MEPs push for stricter limits against corporate tax avoidance

Administration MEPs push for stricter limits against corporate tax avoidance

1y Fraser Simpson, Reporter
HMRC high-value tax cases drop 15%

Accounting Firms HMRC high-value tax cases drop 15%

1y Fraser Simpson, Reporter