Small businesses which employ workers will be subject to tougher rules on Pay as You Earn (PAYE) tax declarations when new regulations come in next year. The Real Time Information (RTI) initiative 2013 will be the biggest shake up in the 68 year history of the PAYE system.
The changes come into effect in April 2013 for large and medium sized employers, August 2013 for small employers
Rather than completing your company’s PAYE taxes at the end of the tax year, you’ll be required to declare them in ‘real time’. This means you will need to submit a ‘Full Payment Submission’ every time an employee is paid.
The aim is to make PAYE more accurate, reduce benefits fraud, and cut the number of demands for underpaid tax at the end of each year.
This does cut down the amount of work usually required before the big tax return at the end of the year, but creates a new chore which employers will have to complete regularly.
For small businesses that manage the payroll themselves, and particularly those that pay their staff weekly, this will be a particular burden. Will it affect your business? Leave us a comment to let us know what you think.
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