FSB discovers a quarter of businesses are unaware of the biggest change to PAYE for 60 years

In the first survey of its kind, the FSB has uncovered a serious lack of communication between the Government and small firms

A quarter of small firms do not know there are major changes to the way they will have to report their payroll coming into force in only six months time, according to a Federation of Small Businesses’ (FSB) survey.

A snap poll of 1,700 small firms found that only 16 per cent of respondents were fully aware of the ‘Real Time Information’ (RTI) programme – a new flagship way of reporting payroll – and shockingly, a quarter (25%) had never heard of it, despite it being critical to the success of Universal Credit.

RTI is a new programme designed by HMRC to gather regular information about employees. It 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. Two thirds (66%) of respondents to the FSB’s survey are not confident that RTI will achieve these aims.

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.

Businesses think that learning new processes (33%) to deal with the changes as well as dealing with potential enquiries and inspections from HMRC (24%) will pose a challenge to their business.

John Walker, National Chairman, Federation of Small Businesses, said:

“With only six months until RTI is due to be implemented, the FSB has real concerns that not enough businesses are aware that is just around the corner. This system is linked to the Government’s flagship Universal Credit scheme and we’re concerned that it could flop if Government does not step up its game in communicating the changes.

“There are a number of steps that a business must complete before they can provide Real Time Information to HMRC so it is critical that those affected know about it. Of the very small number of firms that are aware of the change, 30 per cent have had to buy new software for their business. HMRC needs to act now so that all small firms can prepare their business as they only have six months in which to do it.

“Without adequate communication and education from Government, small firms won’t be able to prepare. It just isn’t fair if they’re then penalised for not complying.”

ENDS

Notes to editors:

The FSB is the UK's leading business organisation with around 200,000 members. It exists to protect and promote the interests of the UK’s Real-Life Entrepreneurs who run their own business. More information is available at www.fsb.org.uk

The figures are based on a snap poll of FSB members, carried out by Research by Design, between 16 and 23 October 2012 which received 1,645 responses. To find out more visit www.fsb.org.uk/survey-panel

Media contacts

Liesl Smith: 020 7592 8128 / 07917 628926 liesl.smith@fsb.org.uk
Sara Crane: 020 7592 8113 / 07595 067068 sara.crane@fsb.org.uk
Prue Watson: 020 7592 8121 / 07825 125 695 prue.watson@fsb.org.uk 

ISDN is available for media interviews.

For regional FSB contacts please go to www.fsb.org.uk/regions