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UK firms must prepare for PAYE change

AROUND a quarter of small firms are not aware they will shortly have to deal with the biggest shake-up to the PAYE system for 60 years.

AROUND a quarter of small firms are not aware they will shortly have to deal with the biggest shake-up to the PAYE system for 60 years.

The Federation of Small Businesses (FSB) says there has been a serious lack of communication between the Government and small firms about the changes.

It carried out a snap poll of 1,700 small firms, which discovered that only 16% were fully aware of the Real Time Information (RTI) programme, the new flagship way of reporting payroll which comes into force in less than six months.

RTI is designed by HMRC to gather regular information about employees and aims to simplify reporting new starters and leavers, plus cut red tape around the payroll process. It will also support the payment of Universal Credits to those who receive them. But two thirds of those who responded to the FSB poll were not confident that RTI would achieve all those aims.

And more than six in 10 said they had not received any communication from HMRC about the forthcoming changes.

A third said that learning new processes to deal with the changes as well as dealing with potential inquiries and inspections from HMRC (24%) will pose a challenge to their business.

Ted Salmon, FSB North East regional chairman, said: “The FSB has real concerns that not enough businesses are aware that is just around the corner.

“This system is linked to the Government’s flagship Universal Credit scheme and we’re concerned that it could flop if Government does not step up its game. There are a number of steps that a business must complete before they can provide Real Time Information to HMRC.”

 

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