Last month HMRC announced that existing micro employers (those businesses who have nine or fewer people working for them) are being given more time to prepare for reporting PAYE under real time information (RTI). This decision means that existing micro employers (and their agents) will be able to report PAYE information, on or before the last payday in the tax month until April 2016, even if their employees are paid weekly or have been paid earlier in the month.

This new easement is in addition to the existing easement for smaller businesses (with fewer than 50 employees) which is available until April 2014.

Micro and smaller businesses availing of these easements are reminded that this relaxation does not mean that they do not need to file in real time at all until their specific relaxation ends; they are still required to report PAYE at least once a month until such time as they are expected to fully comply with RTI.

The newly announced easement for micro employers was taken in recognition that a small proportion of micro employers and their agents still need more time to adapt their processes for real time reporting. Those affected will now have up to two more years to get ready for full real-time reporting before April 2016, at which point all employers will be required to report PAYE in real time.

It should also be stressed that this new easement applies to existing employers only, though those new employers that have fewer than 50 employees can currently avail of the current easement for smaller businesses until April 2014. Therefore all employers starting to operate PAYE after 6 April 2014, as well as existing employers with 10 or more employees, will need to report in real time each time they pay their employees from that date.

This new decision forms part of a wider package, developed in conjunction with key stakeholders and HMRC to assist micro employers as they move towards full reporting of PAYE information in real time. As part of that, work remains ongoing with the software industry to harness technology to develop new ways to report PAYE information in real time - for example by exploring use of mobile applications.

More information about this announcement, draft legislation to enable the easement and the package is available on the HMRC website.