Small businesses have their heads in the sand when it comes to Real Time PAYE, according to our new research.
Our national survey of over 1,000 PAYE-registered businesses revealed that while nearly 60% of employers are now aware of Real Time PAYE, through communication from HMRC or other sources, less than a third (32%) have actually taken any steps to prepare. That figure drops to 26% for sole traders.
Confusion and complacency
This inertia appears to be driven by confusion and complacency, with 35% not taking any steps because they don’t know what they need to do, and a third (33%) taking no action because they feel they have plenty of time to make arrangements.
The changes to payroll mean that employers will have to start reporting PAYE information to HMRC in real time from 6th April 2013, and they have been the subject of a significant communications push by HMRC.
Despite the campaign, many businesses are still unsure they will be ready for the changes, with 31% of all micro-businesses (firms with less than 10 employees) saying they have little or no confidence that they are ready for the changes. Compared to a figure of only 15% of larger SMEs (10-49 employees) feeling the same way, it is clear that the smallest of the UK’s 4.6 million micro-businesses are finding the changes hardest to digest.
Interestingly, small businesses using commercial payroll software are much more confident that they are ready for the changes – 83% compared to just 43% of organisations that run their payroll systems manually.
Real Time PAYE deadline looming
With the deadline looming, employers have less than 30 business days to get ready, which means ensuring all employee information is accurate and up-to-date, registering for PAYE Online, checking or upgrading payroll software to ensure it is compliant or talking to your payroll service provider. HMRC provides a complete checklist of the steps at www.hmrc.gov.uk/rti.
The changes to the payroll system may appear daunting to small business owners trying to juggle the pressures of running their company. However, according to Diana Flier, Payroll Product Manager at Intuit, the steps they need to take are actually very simple.
“Small businesses know they have to take action to be compliant, but want a quick, easy fix. That’s why we built a simple Wizard in our QuickBooks payroll software to guide employers through the process by following three easy steps. Now they can file all the required information with HMRC in one easy click, every time they run payroll.”
Kevin Howlett, founder of IT professional services business, Tridene Solutions Ltd, added:
“We were nervous about the upcoming changes to the payroll system when we first heard the announcement from HMRC.
“We have now installed Real Time PAYE-ready QuickBooks software from Intuit and it has given me peace of mind ahead of the changes in April. By taking the simple steps to prepare now, we now understand the systems and feel confident that the relevant data will be sent to HMRC at the end of each month.”
Intuit: Helping you get ready for Real Time PAYE
At Intuit, we have been involved in HMRC’s Real Time PAYE pilot since April 2012, and many businesses are already using QuickBooks to submit real time information as part of the pilot.
To help you make the transition to Real Time PAYE, we have created a Real Time PAYE site, packed with free information, training and advice to ensure you have all the information and tools you need to be ready to report in real time.
For a fun but informative look at Real Time PAYE, you can also check out our Intuit rap song and video to help you understand the changes.
Get ready for Real Time PAYE – try our Payroll software free for 30 days!
Did you know you can try our Real Time PAYE-ready QuickBooks Payroll software free for 30 days? No card required. Start your trial now.
Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.
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