The ICAEW Forum has published the following request for advice on RTI from an SME that provides payroll services:
"I run a small professional practice in partnership with my wife. We have no staff. We provide a payroll bureau service to a small number of clients with staff numbers between 1 and 17 employees.Advice and comments are, as always, very welcome.
Up to now, this service has been trouble free and and our clients have been understanding of our occasional absences on holiday.
But now we have RTI!
Under RTI, returns must be made before or when a payment is made to a member of staff. If a return is not made the client is in default and a penalty will apply.
There are practical problems. Although a return can be submitted in advance under RTI this is not practical where hourly paid staff are involved as pay details are not known in advance.
RTI would therefore appear to require that we are available to file the clients FPS which means that we can never be away at the end of any month. An alternative problem would be the unforeseeable occasion of a client dismissing a member of staff and wanting to make a payment whilst we are away and so cannot deal with the required FPS.
Can we go away at all?
Does this mean that, in our clients' interests, we must withdraw our payroll service as we cannot undertake to provide a service for at least every working day of the year?
If it does this will affect a great number of small practices.
The same applies to clients with in-house payroll systems but only one member of staff who operates the payroll. How will they deal with holidays and unexpected events.
RTI is, in concept, a sensible move as far as the government is concerned, but HMRC do not seem to be paying the slightest attention to small businesses - as usual!
Does anybody have any practical observations as to how to deal with such situations?
Kit Millington-Hore"
Tax does have to be taxing.
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WTF has been going on?
ReplyDeleteThis is such a huge undertaking that the process, cause and effect charts should have flagged this up. Its pretty basic what if? scenarios that impact upon the SME "customers".
It is almost as though someone demanded that RTI be introduced no matter what!
The only answer is to work round their silly system.
ReplyDeleteIf in doubt the client should pay the same tax and NI as for the previous month or the last 'standard' month. The paperwork will be late. Are there penalties for that? The Revenue don't actually know the date the payments are made to the employees and won't be able to check unless there is a PAYE audit visit.
I work out payroll for Nannys. These have been done quarterly up to now. I suspect that I shall continue to report quarterly and that if the Nanny has salary advances in the interim.......