PAYE changes will have a big impact on UK businesses

5th April 2013

Tomorrow (6th April) is the first Common Commencement Date for 2013, which will see a number of changes to regulation come into effect.

The biggest change for many businesses will be the introduction of a new reporting system, PAYE Real Time Information (PAYE RTI).   Commenting, Dr Adam Marshall, Director of Policy at the British Chambers of Commerce (BCC), said:   -We welcome the government's on-going efforts to deregulate and to limit unnecessary red tape. The flow of new domestic regulations affecting business is being reduced, and we hope that the 'One-in, Two-out' system will also go some way to reducing needless bureaucracy.   -Although the volume of new regulation has decreased, the number of changes emanating from both Brussels and Westminster is still too high. Constant changes to regulation are a distraction for firms at a critical time for the UK economy when companies should be focusing on things like breaking into new markets, building their workforce, and generating wealth.   On the reporting of Pay As You Earn in real time (PAYE RTI), which comes into effect on 6th April:   -Reporting PAYE in real time is a massive change to the way that businesses operate across the UK. HM Revenue and Customs must not underestimate the potential for problems to arise, and must provide firms with ongoing support over the coming months as they adapt to the new system. We are concerned that the new system and future penalties could hit many well-intentioned businesses, especially since there is no transition period from the old system to the new.   -We remain concerned that PAYE RTI will generate new burdens for business, as government agencies use the system to ask for more and more information from employers. This is of particular concern with the introduction of Universal Credit. Employers are committed to obeying the law, but if they are treated as data-collectors by government, they will be distracted from the task of creating growth and jobs.   On the reforms to the employment tribunal system and the removal of employer liability for third party harassment of their employees:   -The reforms to the employment tribunal system are sensible and will encourage the resolution of more disputes before they reach tribunal stage. They should also go some way to reducing the waiting time currently faced by many employers. Removing employer liability for third party harassment of their employees sends the right message to business, and recognises that employers have very little control over the actions of third parties and must not be responsible for them.   On the delay to the removal of the 'strict liability' attached to some health and safety legislation:   -Business will be disappointed that the removal of the 'strict liability' currently attached to certain health and safety regulations has been delayed. The threat of being found liable for a health and safety claim, even when an employer has done everything in its power to avoid accident or injury, is a deterrent to business growth. We urge Parliament to pass this important proposal as soon as possible.