Small business owners lukewarm on RTI implementation

The introduction of real-time information reporting could prove to be a time-consuming nuisance, small business owners fear.

From April 6 2013, employers will have to start reporting PAYE information to HMRC in real time. It is the biggest compliance overhaul to payroll legislation in 60 years.

Peter Gradwell, founder of telephone and internet solutions company Gradwell says, ‘To accommodate RTI, our accountants and HR team will have to spend a couple of extra hours each month on the payment process. RTI will impact our business in terms of demand on time, both in-house and for our external consultants.

‘I feel there are many other activities that my HR staff could be engaged in for the benefit of my business above implementing this change in legislation.’

Timo Schmidt, CEO of food delivery recipe company Gousto agrees. He says, ‘Whenever the government changes anything, small businesses like ours have extra work so hopefully there’s enough support and time to implement. At the end of the day, we have a pretty complex business to grow and time shouldn’t be absorbed by things like RTI.’

Adam Cooke, founder of software company aTech Media finds that the current system for reporting to HMRC (once a year) is far from adequate, and that it has been a disservice to employees who would often have to wait many months for appropriate updates to their tax codes.

He adds, ‘I hope with the RTI system, HMRC will be better informed with a running total of tax/national insurance paid to every employee each year and this will allow them to respond quickly when tax is over or underpaid.

‘For an employee, overpaying tax can be expensive and underpaying can be an issue when you end up with an unexpected large bill at the end of a year which you don’t have the cash to pay.’

Peter Hart, founder of crowdfunding website, thinks that there is only one reason why HMRC is bringing in RTI – so that it can start chasing much sooner for underpayments. ‘While I, along with most business owners, recognise the importance and legality of paying HMRC on time, any cushion, even if a few weeks helps smaller businesses manage their cash flow. 

‘I think that HMRC will be squeezing smaller companies harder and harder, with rates, VAT, corporate tax and in a time when the likes of Starbucks are paying zero corporation tax, I think business owners are losing faith. It almost feels as though the government doesn’t want us to succeed, when in reality it’s the small business owner that holds this country up.’

Ben Lobel

Ben Lobel

Ben Lobel was the editor of from 2010 to 2018. He specialises in writing for start-up and scale-up companies in the areas of finance, marketing and HR.

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