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September 20, 2013

RTI is 'unnecessary', says one third of SMEs

RTI is 'unnecessary', says one third of SMEsSix months after the launch of the Real Time Information (RTI) PAYE system by HM Revenue & Customs (HMRC), nearly a third (31%) of Britain's SMEs have said that the reforms are 'unnecessary', according to new research from accountants HW Fisher & Company.

The poll suggests that most small firms have yet to see the benefits of the new system and many have encountered difficulties with the transition. Almost a quarter (23%) described RTI as frustrating; 31% described the transition as difficult; and 15% said they were still learning.

However, 31% of those polled said they had a positive view of RTI. While many small businesses have had no significant problems adjusting to the new regime, nearly half (46%) said they had encountered hitches or that they were still getting to grips with the move to RTI.

There have also been cost implications for some – 39% said the RTI reforms had added a cost burden to their business and 23% said adjusting to the new system had been time-consuming.

The costs involved vary – 61% said the cost of implementing RTI had been relatively modest, at less than 5% of their wage bills. But many businesses have spent substantially more – for 15% of respondents, the cost of implementation was between 6% and 10%, while 8% said the costs had risen to between 11% and 15%.

69% of small businesses said they were managing RTI in-house, with the rest outsourcing the work to a third party provider.

Under RTI, all businesses must now make a submission to HMRC each time they pay staff, rather than making an annual PAYE return. The system operates in real time and must be administered online.

HMRC has said the reforms will make it easier for businesses to pay the right amount of income tax and National Insurance.

Toby Ryland, a partner at HW Fisher & Company said: "It's clear from our research that the move to RTI has caused many small businesses difficulties, during a time when they would have preferred to have been fully focused on the very tough trading environment faced by most firms."

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