By Claire West
Many businesses could be at risk by failing to understand the new HMRC changes to PAYE schemes. According to the latest figures, less than two out of three small firms are prepared for the HMRC PAYE system changes say experts at AccountantAuctions.com.
According to Accountant Auctions, the Real Time Information (RTI) system is going to be implemented in April 2013 whether you’re ready for it or not, with HMRC testing their pilot version as we speak.
Rachel Whitman, founder of AccountantAuctions.com said:
“around a third of businesses still don’t know that these changes are about to take place, so it is likely that very few Directors know their responsibilities”.
The planned changes mean that HMRC would like to collect the correct amount of tax on a more regular basis, rather than wait until the end of the tax year. “They currently have no insight into what you are paying yourself and staff until the end of the tax year” says Whitman, “and they want to remedy this - there will be no more need to submit a P35 at year end, and this will be replaced by monthly submissions, enabling HMRC to apply the correct interest amounts for late payments.”
To avoid unnecessary fines, many Directors are opting to reduce their salaries below the tax thresholds and submitting nil returns. So are HMRC biting their nose off despite their face?
“Many accountants are scurrying around trying to get their payroll systems updated in order to be able to submit bulk loads on monthly returns, its a head ache no one really needs” concludes Rachel. “Directors that receive a fixed monthly salary, it’s time to do your tax planning at the start of the year rather than the end, so get your house in order now”.