What do online accountants think of Real Time Information?

Online accountants may be interested to read what Nigel Lomax, the owner of TaxAssist Shrewsbury, has to say on the subject of Real Time information.

As we all know, HMRC wants to “simplify” the PAYE system. The Revenue recently launched a consultation in which is outlined two ways in which the current system could be changed.

At the moment, employers send end of year forms to HMRC detailing each employee’s PAYE and National Insurance contributions. With Real Time information, this will be done each time an employee is paid.

The rationale behind this, according to the Revenue, is to relieve the end of year burden from the employer. Payroll information will be sent to HMRC every month but employers will run the payroll and make monthly tax and NI payments as they do now.

The other option is for employers to calculate their employee’s gross pay and send the entire amount to HMRC who will then make the deductions and pay the individual employees.

Lomax believes this option would be great for SMEs as it would remove one of the burdensome administrative tasks. But Lomax also questions whether HMRC’s computer systems are capable of coping with this increased volume of work.

Over the last 12 months, we’ve seen a catalogue of errors from the taxman. Incorrect coding notices have been sent out and people have been given tax rebates, only for the Revenue to ask for the money back at a later date. Then there was the “lost” contributions debacle. Can we be confident that HMRC will get it right if they take full responsibility for employee deductions?

The consultation closed on the 28th February and we now wait with bated breath for the results.

© 2018 All rights reserved. Reproduction in whole or in part without permission is prohibited. See our copyright notice.

Tags: , , , ,

Leave a Reply