The chartered accountant’s poll of small businesses’ views of real time information (RTI) suggests that most have yet to see the benefits of the reforms. HMRC claims the new regime will make the PAYE system more efficient and cheaper.
Under RTI, all businesses must now make a submission to HMRC each time they pay staff, rather than making an annual PAYE return. The system operates in real time and must be administered online.
HMRC has said the reforms will make it easier for businesses to pay the right amount of income tax and National Insurance – and generate substantial savings through the abolition of annual PAYE returns.
However, many respondents to HW Fisher’s poll have yet to be convinced of the new regime’s merits – viewing RTI as unnecessary and, very often, a headache for their businesses.
Nearly a third of small businesses said the reforms were needless, while close to a quarter described RTI as frustrating. However, 31 per cent of those polled said they had a positive view of RTI.
While many small businesses have had no significant problems adjusting to the new regime, nearly half said they had encountered hitches, or that they were still getting to grips with the move to RTI. A further 31 per cent described the transition as difficult, while 15 per cent said they were still learning.
Such problems have clearly been a burden for many small businesses. 39 per cent felt the RTI reforms had added a cost burden to their business, while 23 per cent said adjusting to the new system had been time consuming.
On costs, the majority of small businesses said the cost of implementing RTI had been relatively modest, at between 0 and 5 per cent of their wage bills. But many businesses have spent substantially more – for 15 per cent of respondents, the cost of implementation was between 6 and 10 per cent, while 8 per cent said the costs had risen to between 11 and 15 per cent.
69 per cent of small businesses said they were managing RTI in-house, with the remainder of the companies having outsourced the work to a third party provider.
Toby Ryland, a partner at HW Fisher & Company said that many small businesses need professional help in order to cope with the move to RTI and to reap the benefits promised by HMRC.
He comments: “It’s clear from our research that the move to RTI has caused many small businesses difficulties, during a time when they would have preferred to have been fully focused on the very tough trading environment faced by most firms.
“The poll underlines the importance of seeking professional expertise from an accountant. Those businesses that have opted to use our services to transition to RTI have experienced substantially fewer problems and are now able to see some of the benefits promised by HMRC.”
