Wed, 18 Jan 2012

Small firms lack resources to implement RTI

Small firms will find it difficult to implement Real Time Information (RTI) because they lack IT resources, the Public Accounts Committee (PAC) has warned.

In a report on welfare reform plans the PAC says HMRC needs to consider the impact RTI will have on small businesses. RTI will be mandatory for all companies by October 2013.

“DWP and HMRC are designing a real-time information system for Universal Credit to reduce the risk of overpayments, with benefits being recalculated as soon as circumstances change,” said the Committee.

“Both DWP and HMRC need to understand how the introduction of this system will impact on small businesses and the self-employed who may not have the necessary IT to administer it.”

The report identified that approximately 94% of employees received earnings electronically, but small businesses without electronic payroll systems and the self-employed do not currently submit monthly data to HMRC.

“HMRC told us that it is currently identifying how best to include the last 6% of employees (about 1.5m people) and the self-employed in the RTI system, but the detail of how this is to be achieved remains to be worked through,” the report said.

See also:

• Payroll World and Sage undertaking definitive RTI and auto-enrolment survey
• Entire KPMG UK workforce not paid on time due to human error
• Driver for RTI is hailed as a ‘weapon against fraud’