A third of small and medium-sized enterprises are unaware of important changes to payroll procedures set to come into force in April next year.

A third of small and medium-sized enterprises (SMEs) are unaware of important changes to payroll procedures set to come into force in April next year.

According to a study by business software company Sage, one in three SMEs are not prepared for the introduction of Real Time Information (RTI), and very few understand how it will benefit their business.

When RTI is introduced from April 2013, it will require employers to start providing employee PAYE, National Insurance and student loan information to HMRC at the point of payment every month, rather than just at year end.

The initiative aims to improve the overall operation of PAYE by receiving information from employers more regularly, and therefore enabling HMRC to respond more efficiently to errors that lead to the under or over-payment of tax, which, in time, is expected to help reduce or mitigate fraud.

However, only one in ten of the 1,100 businesses surveyed believe RTI will have a positive impact on their organisation, with nearly half (43 per cent) feeling that the changes will increase rather than lessen the administrative burden.

Neilson Watts, associate product manager for Sage says, 'Although we have seen increased awareness for RTI over the last year, it is still concerning that so many businesses are unaware of the changes and the implementation this will have to their firm.

'RTI will impact all businesses, regardless of their size, and with its introduction firms will benefit by streamlining processes, relieving the much dreaded nightmare of payroll year-end and relieving the increased administrative burden for payroll at this time of year. We urge that firms act now to not only understand exactly how it will impact their businesses but to adequately prepare for the changes coming into play.'

Watts adds that if businesses are aware of the changes early enough and factor it into their plans, then they will be well-positioned to take advantage of the benefits of RTI.

See also: HR headaches for SMEs