In response to the difficulty experienced by  some smaller firms to comply with the October deadline for RTI, the government has decided to extend the deadline to April 2014.

Real Time Information (RTI) PAYE reporting requires employers, including Umbrella Companies, to dispense with the annual round-up of their employees’ payroll under P60 and instead submit information to HMRC each time a worker is paid. Firms employing fewer than 50 workers have struggled to find the administrative resources to comply with this.

The relaxation means that they will now need to submit information just once a month instead of each payday, potentially lowering the number of reports required from 52 per year to 12, with smaller enterprises often paying their staff on a weekly rather than a monthly basis.

A representative of the Chartered Institute of Taxation, Colin Ben-Nathan, said that RTI’s requirement for ‘on or before’ reporting had been “a significant concern” for smaller employers. He welcomed the relaxation, applauding HMRC for listening to the concerns of small employers.

Mr Ben-Nathan continued: “It will help small employers continue to engage positively with RTI and to keep the costs of RTI reporting to a minimum. This extension of the relaxation to April 2014 is very sensible. It will provide more time for the necessary research into whether permanent changes need to be made to the RTI process to take account of the needs of the smallest employers.”

HMRC figures show that 83% of SMEs and 77% of the UK’s micro-employers, of which there are over one million, are already reporting PAYE in real time.

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