Deloitte: Midlands businesses need to face up to RTI
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 Harvey Smith, Director, Tax Practice, Birmingham
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HARVEY Smith, director in Deloitte’s Birmingham Tax practice, warns companies against ignoring a pending deadline. As of 6th April of this year, HMRC will introduce Real Time Information (RTI) reporting of PAYE, which will require employers to submit details to HMRC every time they pay an employee, at the time they pay them. It will also require that they submit this information electronically as part of their routine payroll process. Whilst this forthcoming regime has been public knowledge for a number of years, the reality is that many employers and those responsible for payroll are still underprepared for its introduction. At Deloitte’s recent Employment Tax School workshop, less than 10% of attendees said they were “confident that they had done all the necessary preparation in readiness for RTI”. While this is understandable – employers have a considerable amount of responsibility to ensure the new system works effectively – HMRC is unlikely to be sympathetic to those organisations that have not made every effort to comply. Among the key areas for employers to concern themselves with are: the integrity of the data they’re submitting; the capacity of their IT systems to cope with the expanded reporting requirements; the necessary communications to their employee base of the changes taking place, and the possibility of requests for additional personal information; data protection issues; and both the physical and financial management of the new requirements. For organisations, especially SMEs, who anticipate that they simply won’t be prepared in time, it may be advisable to open a dialogue with HMRC as soon as possible on the specific issues and invite HMRC’s feedback on the points of concern. Resource and focus, at this stage, is likely to be best diverted to the integrity and accuracy of the data in time for the first Full Payment Submission (FPS), so that necessary adjustments can be implemented for subsequent reporting periods. The process is likely to represent a learning curve for all concerned, at least for the first year or so. With this in mind, the hope will be that tough penalties are not enforced by HMRC until later years, but only by facing the forthcoming changes head-on, whether that is achieved via good preparation, seeking help, or opening a dialogue with HMRC, will they ensure that they avoid any unnecessary, and potentially costly, impacts. More articles in
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