RTI for the self employed

RTI for employers is only a couple of weeks away now, reports Harris and Co accountants Northampton.

One of the main drivers for RTI was so that the Government could connect the payroll data to the new Universal Credit system and so prevent the overpayment of benefits. This has been a massive problem under Gordon Brown"s poorly thought out tax credit system, and left the country trying to recover about £7 billion in overpaid benefits.

One aspect of the new Universal Credit system that has received little attention so far is that the self employed will also have to make a monthly RTI submission if they are claiming benefit. To "simplify" things the Government want the self employed with small earnings to claim a "fixed rate" deduction for expenses instead of the actual costs and to switch to a "cash based" system. This is not likely to be any simpler and could actually increase earnings for the unwary!

We expect self employed clients to be talking to us a lot about the new system when it comes in in October 2013!