Small businesses are not prepared for the introduction of real time PAYE, according to new research from small business accounting firm Intuit.
Intuit’s national survey of over 1000 PAYE-registered businesses revealed that while nearly 60% of employers are now aware of real time PAYE, through communication from HMRC or other sources, less than a third (32%) have actually taken any steps to prepare. That figure drops to 26% for sole traders.
This inertia appears to be driven by confusion and complacency, with one third (35%) not taking any steps because they don’t know what they need to do, and one third (33%) because they feel they have plenty of time to make arrangements.
The changes to payroll mean that employers will have to start reporting PAYE information to HMRC in real time from 6 April 2013 and have been the subject of a significant communications push by HMRC.
Despite the campaign, many businesses are still unsure they will be ready for the changes, with a third (31%) of all micro businesses – firms with less than 10 employees – citing they have little or no confidence that they are ready for the changes. Compared to a figure of only 15% of larger SMEs (10-49 employees) feeling the same way, it is clear that the smallest of the UK’s 4.6 million micro-businesses are finding the changes hardest to digest.
Interestingly, small businesses using commercial software are much more confident that they are ready for the changes (83%) opposed to just 43% of organisations that run their payroll systems manually.
With the deadline looming, employers have less than 30 business days to get ready, which means ensuring all employee information is accurate and up-to-date, registering for PAYE Online, checking or upgrading payroll software to ensure it is compliant or talking to their payroll service provider. HMRC provides a complete checklist of the steps at www.hmrc.gov.uk/rti.
The changes to the payroll system may appear daunting to small business owners trying to juggle the pressures of running their company. But according to Diana Flier, Payroll Product Manager at Intuit, the steps they need to take are actually very simple.
“Small businesses know they have to take action to be compliant, but want a quick, easy fix,” said Ms Flier. “That’s why we built a simple Wizard in our QuickBooks payroll software to guide employers through the process by following three easy steps. Now they can file all the required information with HMRC in one easy click, every time they run payroll.”