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KPMG: Less than one in 10 businesses think RTI will save costs 14 August 2012

HMRC saving estimates do not tally with employer views

This is despite HMRC insisting that the PAYE reform, which comes into force for employers from April next year, will result in an ongoing reduction in costs for businesses to the tune of £300m per year.

Of the 43 businesses surveyed by the professional services firm – the majority of which had a turnover in excess of £200m per year – 12% estimated the cost of implementing RTI to be between £500k-£1m and 7% estimated it to be between £100k-£250k.

Additional costs

KPMG warns that in addition to payroll or software system upgrades there are also other costs to be considered when implementing RTI.

For example, the additional resource time required by HR to obtain the information required from employees, the time taken to undertake a payroll data cleanse and additional training required for staff to adjust to the changes.

However, the Revenue maintains that RTI will reduce costs. A spokesman for HMRC told Payroll World: “HMRC estimates a net reduction of around £300m in admin burdens for employers and pension providers. This figure takes into account the removal of end of year submissions and the reporting of new starters and leavers as part of routine payroll operations.

“Through independent research, 70% of employers have told us that they believe the long-term benefits of RTI will outweigh the implementation effort. They also tell us that they believe RTI will help them keep on top of record keeping, prevent them going into debt and reduce the end of year pressure.”

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