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Quarter of small businesses unaware of RTI

October 31, 2012

 

A quarter of small businesses are unaware of HMRC’s Real Time Information (RTI) due to a serious lack of communication from HMRC about its PAYE ‘tax revolution’, according to the Federation of Small Businesses (FSB).

In the most comprehensive survey of RTI preparedness undertaken to date, sampling 1,700 small firms, the FSB findings found only 16% of respondents were fully aware of RTI.

Worryingly, the research found more than 60% of firms had received no communication from HMRC about the changes.

FSB national chairman John Walker says he is concerned that the entire RTI programme could fail if the government doesn’t “step up its game” in raising awareness.

“There are a number of steps that a business must complete before they can provide RTI to HMRC so it is critical that those affected know about it”, he said. “Of the very small number of firms that are aware of the change, 30% have had to buy new software for their business.

“HMRC needs to act now so that all small firms can prepare their business as they only have six months in which to do it.

“Without adequate communication and education from government, small firms won’t be able to prepare. It just isn’t fair if they’re then penalised for not complying.”

The report confirms similar findings of previous awareness surveys, undertaken by KPMG and Sage.

An HMRC spokesman said the Revenue had intensified its RTI communication drive a few weeks ago as customer research demonstrated that around six months before the reform starts is the best time to engage with employers.

It remains unclear whether the employer engagement actions HMRC has committed to will raise awareness of RTI sufficiently ahead of April 2013. So far the only mass employer communication HMRC has committed to is a letter to be sent to 1.4 million employers which was scheduled for the end of October. FSB’s survey findings would suggest more communication is needed.

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