Media Centre > Press Releases > More red tape looming for catering trade, says tax expert

More red tape looming for catering trade, says tax expert

Release date: 26/02/2013

Many catering and hospitality businesses will struggle to comply with major changes to the PAYE tax regime due to come into force this April, according to a leading tax expert.

Paul Aplin, tax partner at A.C. Mole & Sons and chairman of the influential Tax Faculty technical committee at the Institute of Chartered Accountants in England and Wales, says that the new Real Time Information (RTI) rules are unworkable as they stand and their introduction will bring difficulties and greater costs for many hard pressed small businesses.
 
RTI is the biggest shake up in PAYE since its introduction in 1944. From April this year businesses will have to report to HMRC every time they make a payment of wages rather than once a year as they do now. The report will have to be made to HMRC on or before making the payment or in some limited circumstances within seven days of it.
 
For some, this will simply mean making a monthly payroll submission to HM Revenue & Customs (HMRC), but a lot of small businesses pay staff on a weekly or even daily basis. For instance, a pub landlord might pay a barman in cash at the end of a shift. He will have just seven days to report each payment. The same thing happens day in day out in hotels, restaurants and a whole range of smaller businesses. They will be affected in the same way.
“The new rule is unworkable,” said Paul Aplin. “Why can’t small businesses just report once a month? That would enable most to comply fully with the law at little or no extra cost. For many small businesses this new rule will mean running their payrolls 52 times a year instead of twelve. And it will not raise one penny of extra tax”
 
“The main reason for the on or before rule is that the Department for Work and Pensions (DWP) wants payroll information as close to real time as possible for means-testing the new universal credit state benefit.
 
“The government – and particularly the DWP – must surely see that the seven day rule is at odds with its stated aim to reduce the burdens on small businesses. Monthly reporting would solve a very large part of the problem.
 
“I am not against RTI. I have been a long time advocate of harnessing IT to improve tax administration and real time reporting of earnings and benefits is a logical step. I also see the sense of integrating this information into the benefits system so that benefits can be based on more up to date information. There are however features of RTI that, unless they are rethought, will impose new, pointless and unproductive burdens on smaller businesses.”
He is calling on people in the catering and hospitality trade and their financial advisers to write to their local MP if they believe the “on or before” RTI rule needs to be changed before April.
 
Ends
 

Media Release
Stafford House, Blackbrook Park Avenue, Taunton, Somerset, TA1 2PX. Tel: 01823 624450
 
Media enquiries
Linda Findlay T: 01392 841402 M: 07598 753 088 E: lindafindlay99@yahoo.co.uk
Paul Aplin is available for interview on this issue. Please contact Linda Findlay, details above, or contact Paul direct on M: 07739 892194 E: paulaplin@acmole.co.uk
 
Notes for editors
A C Mole & Sons is an independent West Country firm of Chartered Accountants and Chartered Tax Advisers with several thousand clients across the UK. Clients are both individuals and businesses spanning a broad range of sectors including farming, the motor trade, manufacturing, retail, leisure and professional services.
The firm filed the UK’s first ever electronic tax return in 1997 and has a national award winning tax team.
Stephen Golby is the firm’s managing partner and advises a wide range of businesses.
David Perry and Chris Loveluck specialise in advising the farming community on tax and finance issues.
Paul Aplin OBE is a tax partner with the firm and is also Chairman of the Tax Faculty Technical Committee of the Institute of Chartered Accountants in England and Wales and a member of H M Revenue & Customs Administrative Burdens Advisory Board.

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