By Daniel Hunter
Business owners looking to get to grips with the biggest shake-up to PAYE in almost seventy years have been increasingly turning to business software and services provider Sage since the launch of Real Time Information (RTI) reporting on April 6th.
With business owners frustrated by the complexities of the free submission tools available and feeling vulnerable due to their lack of support, many are turning to paid for software solutions.
Sage has seen its RTI-ready software being adopted by customers that had already tried to file their PAYE through RTI using alternative software, but had switched after being disappointed by their initial experience or after suffering filing problems. A significant proportion — one fifth (21%) - of all new customers in April turned to Sage after having problems with the free to use software.
The insight was announced at the same time as the latest Sage Omnibus survey of more than 680 business owners, revealed that 84% have now submitted PAYE in real time to HMRC. The research also highlighted that despite concerns around increasing workloads and disruption that the new legislation would bring, four out of five respondents (81%) have not had to change their processes to accommodate RTI.
The Sage Omnibus also suggested that business owners were broadly pleased with HMRC’s education and awareness drive about the arrival of RTI. Two out of three business owners (64%) believe that HMRC’s communications around RTI reporting requirements have been either excellent or good.
However, a quarter (28%) of respondents thought communications had been poor and the research revealed that some confusion still exists. Just 13% of business owners correctly understood the alteration that means firms with less than 50 employees only need to submit RTI to HMRC once a month until October even if they pay weekly.
“RTI represents a fundamental change to how 1.4 million businesses interact and provide information to HMRC, so it’s not surprising that there have been a few high-profile teething problems," explained Lee Perkins, Managing Director, Small Business Division, Sage.
"But the major headaches for most people seem to have come from issues with free software, and that’s driving people to come to companies like Sage where they know there is always someone available who can talk them through any problems at the end of the phone."
RTI came into effect from April 6th 2013, and requires employers to start providing employee PAYE, National Insurance and Student Loan information to HMRC every time they pay an employee, rather than just at year end. As a result reporting to HMRC on a more regular basis, tax records will be more accurate and errors in the system should, in theory/ become a thing of the past. RTI represents one of the most fundamental changes to payroll reporting requirements in the past seven decades, and will affect the 1.4 million UK businesses that have more than one employee on the payroll.
“It is a concern that so many people are still not 100 per cent clear on a scheme that they have to get involved with. My advice to business owners is if you have any questions or uncertainty speak to your accountant or payroll software provider today. RTI is the lynchpin for the Universal Credit scheme and an effective way for the government to eliminate tax credit errors. Any business that is not filing RTI will come under the microscope come October, so get everything lined up now,” added Perkins.
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