New research carried out by the Forum of Private Business has shown an increased awareness among small firms of the Real Time Information system being introduced by HMRC in just two months’ time.

RTI is a new payroll system being introduced by HMRC in April that will affect all business with paid employees. The Forum’s Chief Executive, Phil Orford, said: “Real Time Information is looming and while our research suggests there is a growing understanding of what this means for businesses, there are a significant number still ignorant and unaware.

“The other important issue raised by our research is the huge lack of confidence small firms have in HMRC to cope with the changes – 65% of businesses expressing concern at this.

“If nothing else, this paints a depressing picture of small firms’ confidence in a government department that is key to their operations. Those businesses involved with the RTI pilot run by HMRC last year were a little more confident here, but there are clearly still fears about how seamless the transition will prove to be.”

But he added: “The positive news though has to be that compared to earlier studies carried out just a few months ago, more than two thirds of small businesses now know what’s expected of them. While it’s likely this is in part because of the work we’ve carried out with our own members to raise awareness of RTI, it still suggests the message is slowly getting through.”

The Forum research also saw many firms question the benefits of RTI. Just under half of respondents did not see any benefits, while 1 in 5 felt the scheme would make them less likely to take on employees. 

Added Orford: “With this uncertainty in mind we are calling for HMRC to adopt a sensible and reasoned approach towards enforcement in the early stages. Already the government has announced the delay to some fining powers, but the effect of the switch to online reporting must not be underestimated, nor the cost of investing in new software ignored. Ideally we want to see a moratorium on fines in all but the most serious cases.”