Two months on: How are small businesses dealing with RTI?

HMRC recently announced that 83 per cent of SMEs are now successfully making RTI submissions and that information about 44.5 million payments made between 6 April and 5 May have been successfully reported in real time.

However, Mark Paraskeva, CEO of IRIS Software, tells us that, it has also been revealed that up to 600,000 PAYE schemes have still failed to make the switch. HMRC has already started contacting these non-compliant schemes with the possibility of penalties if they fail to achieve compliance. An exact figure of non-compliant schemes is said to be confirmed by HMRC before the end of the month.

Many businesses have reported problems when trying to file submissions using HMRC’s free online PAYE tool. As well as some technical issues with the software, feedback we have received is that since HMRC updated the tool earlier this year, the system requirements have been increased, rendering many employers’ computers incapable of running it. Some employers whose computers do meet the minimum requirements have still found that the software is not running smoothly on their systems.

For employers encountering problems with HMRC’s free tool, there are other options which can be taken. A number of commercial payroll software providers offer free RTI compliant software. These are usually aimed at smaller businesses with fewer than 10 employees and offer functionality designed for a basic payroll.

For businesses with more than 10 employees or more complex requirements there are a range of paid for software options available. The decision of which supplier to go with should not be taken lightly though, as different companies will offer different levels of support. A supplier that offers inclusive support can be a huge help at any time, but this is especially true with major legislative changes such as RTI and the imminent workplace pension reforms.

One of the main pieces of advice we gave in the run up to RTI was for businesses to educate themselves on the change and the effects it would have on their business and processes. You want to be confident that your payroll software provider will be by your side through any changes and that you can rely on them to help you. This is why it is advisable to try and find a software vendor who offers a “complete solution” for RTI. As well as paid for training seminars, some suppliers have offered free online introduction courses, whitepapers, advice lines and “health checks” to help assess your level of preparation and specific needs.

It seems as though the worst of RTI may be behind us, with many people saying that once they have the correct data in their payroll software, compliance is no more than “clicking an extra button”. As with any major change, the earlier you prepare and the more thorough you are in doing so, the easier you will find the eventual transition.