HM Revenue and Customs (HMRC) has proposed that employers be allowed an extension for sending in real-time information (RTI) reports.
From April 2013, employers will be required to begin to send pay-as-you-earn (PAYE) information to HMRC on, or before, the date the payment is made.
However, concerns have been raised that, in certain circumstances, this would be nearly impossible to carry out, and HMRC has proposed that, in situations where it is impractical to report in real time, employers will be give some leeway.
It has proposed a seven-day reporting period in cases where payments vary depending on the work done, such as a casual worker in a pub who is paid at the end of the night, and payments to employees for whom employers do not have to maintain a deduction working sheet.
It has also proposed a 14-day reporting period for payments of benefits and expenses that are subject to class one national insurance contributions, but not taxed under PAYE.
HMRC will publish draft regulations for comment in mid-November, as well as further guidance on reporting ad-hoc advances of pay and operational practice on reporting payments made by expat employers and those operating share schemes.
It is sad that the government has gone down the road of allowing HMRC to produce yet another expensive and bureaucratic system. The fact is that with the correct system in place businesses would not have to submit anything at all to HMRC they would simply pay any employees gross into their “income account”. This system which is based around banks amd mutuals modified current accounts would save the government billions and small businesses billions (not millions which RTI supposedly does … but won’t in any case). It also gets rid of tax forms for 95% of those that need to fill one in now. It scraps tax codes and even census forms. Quite why the government won’t even discuss such a change I think is down to pure laziness and sloppy government it isn’t as if the coalition would be philosophically against such a move. It could be, however, they they don’t want to force the banks to do anything 21st century or that is socially useful … but they could bring in the scheme on a voluntary basis forcing only our nearly nationalised bank (RBS/Natwest) to trail blaze. If you want to know more try http://taxandbenefit.org which is probably the best site at explaining such a system.