United Kingdom

Details

  • Service: Tax
  • Type: Press release
  • Date: 14/08/2012

Most businesses now planning for Real Time Information reporting but is it all thought and too little action? 

  •  86 percent of respondents say they are now planning for RTI, according to KPMG survey

 

  • But despite this, relatively few have completed the first stages of preparing for RTI

 

 

86 percent of businesses have started to plan for implementing Real Time Information (RTI) reporting of payroll data to HMRC when it becomes mandatory in April 2013, according to a survey of 42 large businesses by KPMG in the UK.

 

This is a significant increase from a similar survey conducted by KPMG in March this year in which two thirds of employers had yet to begin to prepare.

 

But despite almost nine out of ten respondents saying that they had commenced planning, only a fifth (21 percent) had conducted a payroll data cleanse, a process which, according to KPMG, is one of the first and most basic actions to take when preparing for RTI.  Nearly two thirds (65 percent) said that they had not considered the cost of RTI to their business (another crucial element of the planning process) and less than half (44 percent) said they were confident that their current payroll could cope with RTI’s requirements.

 

Steve Wade, director at KPMG, commented: “It’s very good news that so many businesses are starting to plan for RTI but our data suggests that they really are at the very beginning of that process and they quickly need to translate thoughts into actions if they are to be ready in time.”

 

HMRC have recommended that businesses take the following actions to prepare for RTI:

 

  • Carry out data cleanse

 

  • Talk to your software payroll provider

 

  • Review recruiting and payroll process for new employees

 

  • Talk to relevant stakeholders

 

Steve Wade continued: “With RTI becoming mandatory from next April, employers really do need to start implementation.  If their employee data is up to date, they don’t operate multiple payrolls, have a low turnover of staff and their payroll provider is ready, the transition may be very smooth.  But if this is not the case, they may well need to do some housekeeping before next April to reduce the chance of HMRC rejecting their data submissions and possibly imposing penalties.”

 

Common areas to address

 

Poor employee data: “garbage in: garbage out”

 

In KPMG’s experience, the most common issue for businesses is poor employee data.  This is why the data cleanse is the first step in the planning process.  Errors frequently found are incorrect dates of birth, wrong names and inaccurate address data.

 

It is important that employers have accurate employee data as HMRC may well reject an entire submission on the basis of a single error.

 

Matthew Hunnybun Partner KPMG commented: “The old adage ‘garbage in: garbage out’ certainly holds true for RTI.  Under the current PAYE regime, it’s not that much of an issue if a date of birth is wrong or an employee’s name is misspelled.  Under RTI however, such errors can have serious consequences if HMRC is not able to match the data the employer submits with the information it holds for the employees because this can lead to penalties being charged.”

 

Payroll issues

 

Beyond the employee data, the next most common issues tend to be around the payrolls themselves.  Usually these fall into two categories: issues relating to the employers’ side of the payroll (such as running multiple payrolls which could be consolidated into simpler ones) or they are on the payroll suppliers’ side where in general they relate to the suppliers’ ability to cope with RTI requirements.

 

Matthew Hunnybun commented: “Important questions an employer should ask themselves are:

 

  • Do I currently obtain and submit all the information required by HMRC about a new employee to HMRC before I make the first payment to the employee?

 

  • Could I submit my year end summary (form P35) on 5 April?

 

  • Is my payroll always correct by the payroll cut off date? i.e. no adjustments no advances etc.”

 

Matthew Hunnybun concluded: “If the answer is no to any of these questions then the employer will have difficulties with RTI.”

 

 

-Ends-

 

For further information please contact:

 

Margot Cowhig, KPMG Corporate Communications

Tel:  0207 694 4246 Mobile: 07920 274856: margot.cowhig@kpmg.co.uk

 

KPMG Press Office: 0207 694 8773

 

About KPMG:

 

KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 11,000 partners and staff.  The UK firm recorded a turnover of £1.7 billion in the year ended September 2011. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 152 countries and have 145,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.  KPMG International provides no client services.

 

 

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