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?
Tax does have to be taxing.
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