Employers are leaving the planning for Real-Time Information (RTI) “dangerously late”, according to KPMG.
Research by the firm has highlighted that two-thirds of companies have not started to prepare for the implementation of RTI, while 18 per cent said that they were not aware of upcoming deadlines in relation to it.
HMRC wants organisations to provide RTI on tax, National Insurance contributions and other deductions every time an employee is paid in order to improve the Pay As You Earn system. It will also expect a variety of other data to be supplied which will be utilised by the new tax credits system, Universal Credits.
A trial of the scheme is scheduled to start this April with 300 pilot employers. HM Revenue & Customs (HMRC) will then require other businesses to begin submitting RTI from April 2013, with all employers doing so by October 2013.
Under the compliance rules the Senior Accounting Officer will be held personally responsible for these processes, making the issue even more pressing.
Matthew Hunnybun, Tax Partner at KPMG, said: “Adopting RTI will require major IT changes to most businesses’ current payroll systems and processes and in many cases, could lead to significant additional costs.”
The survey also revealed that many employers are operating more than one payroll and with more than one pay period. Many of the respondents also used relatively “low tech” systems to administer their payrolls. For instance, 22 per cent said they made payments by cheque and nearly half said that their payroll was not linked to the HR system.
“In most cases it will be much cheaper and more efficient for employers to consider consolidating and reviewing these [systems and processes] before implementing RTI, rather than converting multiple systems,” concluded Hunnybun.
