News story

HMRC launches package of help for micro businesses

HMRC has launched a package of support to help businesses with nine or fewer employees report Pay As Your Earn information in real time.

More than 99% of Pay As You Earn (PAYE) records are now successfully being reported in real time. Almost 93% of employers, and nearly 99% of employers with 10 or more employees, are now using the new process to send Pay As You Earn information about their employees in real time, and the majority are finding the new system easy to use.

HM Revenue and Customs (HMRC) has launched a continued package of support for micro businesses (with nine or fewer employees) who need more time to adapt to reporting PAYE information in real time. This will allow them to report PAYE information on or before the last payday in the month, rather than every payday, until April 2016.

This is narrower than the existing relaxation to real time reporting, which applies to employers with up to 49 employees and will end, as planned, in April 2014. Employers who are already reporting PAYE information on or before the date they pay their employees should continue to do so. And HMRC will be encouraging and supporting micro businesses to adapt their processes to move to payday-by-payday reporting as soon as possible.

All employers will have to report PAYE on or before the date they pay their employees by April 2016.

The package was developed with employer, agent and payroll software representatives and the Department for Work and Pensions, to help micro employers as they move towards reporting PAYE information in real time.

The package, which applies only to existing employers, also includes:

  • improved guidance, including best practice scenarios
  • working with the software industry to harness technology to develop new ways to report PAYE information on or before the date employers pay their employees – for example, by exploring the use of mobile apps.

Real Time Information (RTI) will support the operation of Universal Credit, which brings together means-tested in and out-of-work benefits.

HMRC’s Director General for Personal Tax, Ruth Owen, said:

The vast majority of employers are now successfully reporting PAYE in real time and are finding it easier to do this than they expected. But we appreciate that for some micro employers it has presented challenges for them to meet the deadlines. This package strikes a good balance by ensuring RTI improves PAYE processes while minimising the impact on micro businesses and their agents by giving them up to two years to adapt.

For more information, read details of the package of help.