Small businesses in the UK should do their research and get up-to-date with the new payroll tax system Real Time Information (RTI), which is due to be implemented in April this year.
HM Revenue and Customs (HMRC) has reminded companies that they should buy or update their current payroll software so that it is able to handle the new system, which is the considered the biggest change to business tax in 70 years.
RTI will require every employer in the country to update HMRC with financial data each time its payroll is run, rather than just at the end of the tax year. The idea is that it will increase the accuracy of data, increase the ability of fraud detection and reduce the number of errors, which should serve to save the taxpayer millions of pounds.
It's a big change for firms in the UK, yet, according to research from the Forum of Private Business (FPB), many are still in the dark over the changes. The organisation's chief executive Phil Orford has suggested that companies are not aware of what they should be doing as the deadline draws closer, adding that 65 per cent of small businesses do not think HMRC will be able to cope with the new system.
"If nothing else, this paints a depressing picture of small firms' confidence in a government department that is key to their operations. Those businesses involved with the RTI pilot run by HMRC last year were a little more confident here, but there are clearly still fears about how seamless the transition will prove to be," he said.
By having the appropriate payroll software and ensuring it is completely up-to-date, they can guarantee payroll duties are all completed correctly, reducing the risk of disobeying any regulations.
HMRC is even offering free software to help employers that have nine or fewer members of staff to get ready for the changes in the new tax year.