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RTI costs criticised by SME group 19 March 2014

Real Time Information (RTI) lacked proper external stakeholder engagement in its design phase and has created significant costs for small businesses, according to an independent group set up to oversee HMRC.

In a letter to the Revenue, the Admin Burdens Advisory Board’s (ABAB), which works with HMRC to improve the customer experience of SMEs, says it is also concerned about “entrenched views that proved difficult to shift”.

While the ABAB recognises RTI as “an important and worthwhile modernisation of the PAYE system” its chair, Teresa Graham, said: “It took some time to achieve a proper debate with HMRC about the issues that ABAB members could see in practice with RTI.

“This was disappointing: surely that is what we are here for? Essentially, we were not involved at an early enough stage and, when we were brought in, some entrenched views, not solely in HMRC, proved difficult to shift.

“We feel that some of the problems encountered during implementation could have been designed out had external stakeholders, including ABAB, been listened to at a much earlier stage.

“We remain concerned about the representation of the benefits of RTI to business, in terms of how these are expressed as a reduction in administrative costs.

“In simple terms, whilst we can see some long term gains, the costs to businesses in the interim seem to us to be significant.”

Graham says she wants to assist HMRC in ensuring businesses are complying with RTI not “simply putting in returns to ensure obligations appear to be met” and is recommending the Revenue carries out surveys to test small businesses on the ‘on or before’ rules.

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