The introduction of so called 'Real Time Information’ in April was going to require all employers to provide information about tax and National Insurance deductions every time they paid an employee, rather than annually.
However, those with fewer than 50 staff will now be allowed to report monthly, until October.
The Federation of Small Businesses welcomed the concession and called for it to be made permanent.
RTI is intended to support the introduction of Universal Credit in October and help HMRC police employers’ tax affairs more efficiently.
It requires firms to invest in new payroll software or update their current systems, with advisers warning there could be a disproportionate cost impact on the smallest companies.
George Bull, senior tax partner at accountants Baker Tilly, said: “Why has it taken so long for this outbreak of pragmatism? Ministers want SMEs to be the drivers of recovery, but insist on introducing an IT-based policy that for many is simply extra bureaucracy, and for some is impossible to implement properly.”
He added that it is a system “designed by civil servants for civil service benefit”.
A spokesman for HM Revenue & Customs said: “[We have] listened closely to our stakeholders and we have adapted our plans. We recognise that a minority of employers who pay weekly or more frequently and run payroll monthly may need a little longer to adjust to the new way of reporting.”
Until October 5, these companies will be permitted to send information to HMRC by the date of their regular payroll run but no later than the fifth of each month. The taxman will review RTI in the summer.
