Commenting on today’s announcement from HMRC of plans to ease PAYE reporting requirements for small businesses, Steve Wade, employment tax director at KPMG in the UK, said:
“The pain is relieved – at least for the moment. HMRC has thrown a lifeline to small businesses by temporarily relaxing the rules about exactly how ‘real time’ the real time reporting of PAYE data to the tax authorities has to be for small businesses.
“And hopefully this short term respite will allow them to work out a more permanent way in which to address the concerns that these small employers have raised around the difficulties of complying with real time PAYE reporting.
“Originally, under plans designed to support the introduction of the universal credit during 2013, there were proposals that PAYE data would have to be reported to HMRC as and when employees were paid. But today HMRC have recognised that this is extremely challenging for some small employers who pay employees weekly or more frequently (perhaps even daily in the case of casual shift workers), but only process their payroll on a monthly basis as they are likely to struggle to report PAYE information in real time. In response to this, HMRC have said they will relax the reporting requirement until 5 October 2013 so that employers (provided they have fewer than 50 members of staff) may send information to HMRC on the date of their regular payroll run but no later than the end of the tax month (5th).
“This easing of the requirements should make compliance significantly easier and cheaper for many small employers up and down the country – a sensible and welcome move at a time when so many businesses are already struggling and we need to get the UK economy up and running.
“This is a step in the right direction. HMRC have already published certain relaxations but they are overcomplicated. Let us hope the Government also takes this opportunity to further simplify the system in Wednesday’s budget.”
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