13 Nov 2012 12:30pm

ICAEW calls RTI "impossible"

ICAEW has called the new PAYE requirements, Real Time Information (RTI), “at best unrealistic and at worst impossible”

ICAEW says that while the transition may be relatively straightforward for larger operations, smaller business will struggle with the change.

HMRC is planning to roll out RTI from April next year, with all employers taking part by October. The pilot scheme currently involves 500 employers. The major changes are on how they report PAYE, needed to calculate the government’s planned Universal Credit.

ICAEW argue that due to restrictions under RTI, employers have to submit a return within seven days. They say it "will not work for many businesses."

"It’s not yet clear what HRMC will do if faced with widespread non-compliance by employers – will they apply penalties or turn a blind eye? Either way, the requirement could inflict serious damage to the credibility of the UK tax system," said Frank Haskew, head of ICAEW Tax Faculty.

Setting aside the costs of more frequent reporting, RTI is intended to reduce employer costs by £300m, and be a key part of government moves to tackle fraud and error. Its introduction has prompted some discussion in tax circles. A poll of 1,700 firms by the Federation of Small Businesses last month found that 25% had never heard of the new RTI payroll system, with only 16% fully aware of it.

In addition, two thirds of respondents to the survey were sceptical that RTI will achieve its aims and more than 60% of firms have not had any communication from HMRC about the changes.



Raymond Doherty


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