New real time information implementation date is still too soon

HMRC has had a rethink on the timeline for the compulsory implementation of real time information. Pilot schemes are still due to commence next April but employers will now have until October 2013 to implement the system.

The RTI system will mean that employers have to send data to the Revenue every time they run a payroll rather than the current system of year end filing.

However, experts from various accounting bodies believe the deadline is still too tight. Jayne Vaughan from KPMG pointed out that HMRC missed a deadline of March 31st to inform employers and developers of accounting software what is required of them.

Without knowing what is required of them, employers can do little to prepare for what is going to be the biggest change in employment tax since the introduction of PAYE in 1944, she concluded.

Alastair Kendrick from Mazars said his major concern was whether the payroll software firms are comfortable with the timetable.

Since the implementation of real time information was first discussed, the timetable has been one of the major concerns. HMRC needs to have systems that will cope with the vast increase in the amount of data it receives on a monthly basis, and employers, some of whom don’t use payroll software at all, will have to get to grips with a completely new payroll processing system.

And what is going to happen when income tax and national insurance deductions are eventually merged? Will employers be left with a hefty bill for all this new software they need to cope with constantly changing systems?

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