According to a survey by the Federation of Small Businesses, a quarter of small firms are unaware of the biggest change to PAYE for 60 years, indicating a serious lack of communication between small business owners and the Government.
The snap poll of 1,700 small firms found that only 16 percent of those surveyed were fully aware of the implications of the real-time information (RTI) scheme to their payroll.
Under RTI employers will send PAYE data electronically to HM Revenue & Customs (HMRC) each time they pay their employees, rather than sending a separate return at the end of the year and most businesses will start with the scheme in April next year.
The scheme aims to simplify reporting new starters and leavers as well as make the payroll process simpler and less burdensome. It will also support the payment of Universal Credits to those who receive them.
However, 66 percent of respondents to the survey are not confident that RTI will achieve these aims. While, more shockingly, with less than six months to go until businesses have to comply with the new rules, more than 60 per cent of firms have not had any communication from HMRC about the changes.
Moreover, a third of the businesses owners polled think that learning new processes to deal with the changes will pose a challenge to their business, while just under a quarter felt the same about dealing with potential enquiries and inspections from HMRC.
As the FSB pointed out, of the small number of firms that are aware of the change, 30 percent have had to buy new software to supply the data HMRC needs, so the department needs to act now so that small businesses can prepare in the six months they have left.
As an accountant, Simon Denton specialises in providing PAYE advice, support and guidance.