How Real-Time PAYE has affected SMEs
About 6 years ago the Government changed the rules for companies reporting PAYE information.
Since 6 April 2013, companies have had to follow a mandatory process called Real Time Information (RTI), which sounds like an episode of 24 with Jack Bauer stuck on the line to HMRC.
Instead, this meant that SMEs had to update their payroll software so it would immediately inform HMRC of their employees pay and deductions each time they paid their wages.
Why did the Government do this?
It’s easy to see that the Government would’ve changed its policy to increase visibility over tax payments. What was less easy to see was the impact that this would have on SMEs trying to manage their cashflow.
How has this impacted SMEs?
Before the change, SMEs had a little slack when it came to updating HMRC on these matters. As our Sales & Marketing Director Andy Grantham commented at the time, SMEs were able to use the Crown as a quasi-overdraft facility and were able to delay payments or agree on repayment plans.
It was one workaround that let businesses manage their cashflow, especially if they were struggling for working capital to draw from.
As Andy explained, HMRC allowed this during the early part of the recession to assist ailing businesses. As time went on they started tightening up on processes like these.
How are SMEs dealing with this?
In only a few years accounting software has improved and allowed SMEs to handle these little fiddly aspects of company financial management.
We predicted at the time that this would open up more cashflow issues for SMEs and we weren’t wrong. More SMEs than ever are looking to cashflow solutions.
Start closing your cashflow gap
If you’re tired of seeing that widening cashflow gap then maybe one of our Invoice Finance solutions could work for you.
With Invoice Factoring you will get to work closely with one of our friendly, highly-trained credit controllers and a dedicated Relationship Manager. Or if you would prefer to maintain full credit control then Invoice Discounting could be cashflow solution for you.
At Skipton Business Finance our friendly teams across the UK can provide your business with working capital from as little as £25,000 to as large as £5m.
If you would like a no-obligation FREE quote email firstname.lastname@example.org or use the quick and simple form on the right and one of our regional experts will call you back.
About Skipton Business Finance (SBF)
Skipton Business Finance provides businesses with working capital through flexible Invoice Finance solutions, including Invoice Factoring, Invoice Discounting, our confidential My White Label solution and our interest-free Skipton Select solution.
SBF can provide working capital to a business by advancing funds varying from £25,000 up to £5m.
Backed by the Skipton Building Society, we look at the individual merits of a business as part of our underwriting criteria.
We look at potential sales figures and the whole context, not only credit scores.
We don’t just run details through a computer to make a decision. We sit down with you and understand how your business operates, how you want to be funded and how we can support you.
Want to understand how Invoice Finance can help your business? Why not have a look at our solutions: