ACCA - The global body for professional accountants
While HMRC has said it will take a soft approach with businesses to errors and delays in the early stages of RTI, even allowing for the recently announced monthly reporting for some employers until October this year, the true penalty will be felt within the businesses themselves who become bogged down in the endless stream of real time reporting when they should be focused on aspiring for growth
—Chas Roy-Chowdhury, head of taxation, ACCA

Universal Credit regulations should be changed to take account of the burden the new Real Time Information (RTI) system will have on businesses, warns ACCA (the Association of Chartered Certified Accountants)

ACCA says that the full impact of RTI will be felt by businesses in October when the new Universal Credit system is rolled out. 

Chas Roy-Chowdhury, ACCA head of taxation, says: 'UK businesses will wonder what has happened to the Red Tape Challenge when RTI and, subsequently, the new Universal Credit systems kick in. While there will be teething problems when RTI begins on April 6, the full brunt of how burdensome this whole system is for businesses will be felt when the Universal Credit regime comes into force. 

'Under the new Universal Credit system, the employer has a strict requirement to report any change in circumstance relating to the pay of an employee in real time, which sounds simple enough. However, while the monthly PAYE return has a 19th of the month filing deadline, RTI reports, called 'on or before' reporting, are in addition to this and allow for changes to an employee’s pay which occur outside of the normal PAYE filing. This is the real burden and can create a multitude of additional 'on or before' filings. 

'While HMRC has said it will take a soft approach with businesses to errors and delays in the early stages of RTI, even allowing for the recently announced monthly reporting for some employers until October this year, the true penalty will be felt within the businesses themselves who become bogged down in the endless stream of real time reporting when they should be focused on aspiring for growth. 

'The Department of Work and Pensions needs to accept that UC regulations should be changed to reduce the disproportionate burden upon businesses. It should be optional for all businesses, not just SMEs, to choose whether they need to file the 'on or before' information more frequently than the monthly payment schedule for UC claimants. The marginal benefits of the strict ‘on or before’ obligation are by no means clear relative to the obvious extra burden on the whole of the UK employer community, not just those with UC claimants on their payroll. 

'Even if the business community and the payroll and accountancy professions that support UK enterprise meet these challenges with success, we question whether DWP will be able to cope with RTI.'

In March, ACCA and other professional and business groups secured a deferral RTI implementation for businesses with 50 or fewer employees until 6 October 2013, but ACCA warns that the problem of ‘on or before’ filing will not vanish and will remain even after 6 October. 

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For more information, please contact:

Steve Rudaini, ACCA Newsroom
+ 44 (0) 207 059 5622
+44 (0) 780 113 3985
steve.rudaini@accaglobal.com 

Helen Thompson, ACCA Newsroom
+44 (0)20 7059 5759
+44 (0)7725 498654
helen.thompson@accaglobal.com 

Notes to Editors

  1. ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management. 
  2. We support our 154,000 members and 432,000 students in 170 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. We work through a network of over 80 offices and centres and more than 8,400 Approved Employers worldwide, who provide high standards of employee learning and development. Through our public interest remit, we promote appropriate regulation of accounting and conduct relevant research to ensure accountancy continues to grow in reputation and influence. 
  3. Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. We believe that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. Our values are aligned to the needs of employers in all sectors and we ensure that through our qualifications, we prepare accountants for business. We seek to open up the profession to people of all backgrounds and remove artificial barriers, innovating our qualifications and delivery to meet the diverse needs of trainee professionals and their employers.