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RTI reconciliation problems

Has anyone else experienced HMRC altering the FPS submission for no reason and without an audit trail?  Has anyone got any idea what is happening with the technology inside HMRC - is it up to the task?

Client runs a single monthly payroll of about £3m pm which we always square to the penny.  The PAYE is over £1m per month, which we pay using BACS to close the loop.

The client has received a letter from Debt Collection regarding a £35k shortfall in months 1-3.  We phone Debt Collection and when they read out the numbers they have on their system, it bears absolutely no relation to the FPS which we have both on paper and electronically for months 2 & 3.  Month 4 falls due tomorrow, so when that was checked as a precaution it was also wrong, BUT it resulted in an apparent overpayment of £35k, neatly balancing out the errors in earlier months. (No EPS was due or submitted)

Debt Collection cannot explain where they got the numbers from and have referred it back to the main office advising the figures are "in dispute" and not to proceed with collection.  The client is bemused but happy, although it makes it look like we did something wrong about which we are very unhappy.

I'm tempted to start invoicing HMRC for the wasted time and impact on our reputation with the client.

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By MJShone
22nd Aug 2013 08:53
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By DMGbus
22nd Aug 2013 09:05

It is a known problem

HMRC employers helpline will have a record of FPS breakdown and agree the filed figures.

Online balance is a higher figure which Collector of Taxes admits that they cannot justify (except to say it's come from your FPS").

Collector taxes agrees to withold collection proceedings on the excessive amount.

An hour on the 'phone to Employers helpline and Collector of Taxes in June had failed to get online liability put right so in August a letter written to Collector of Taxes.

About a week after letter to Collerctor of Taxes the month 4 liability is showing too low by the the too high amount difference for month 2.

Additionally month 1 payment was originally wrongly allocated by Collector of Taxes to month 2 then subsequently an arbitrary incorrect split between months 1 and 2 made by Collector of Taxes.

Result online account balances out overall but gives the false impression that for two months client made payments that were too low and for a further month show that client paid too much.

HMRC have been slow to admit that there is a problem (bad publicity for them!) but have recently (12th August) announced a special section to deal with the problems:

http://www.hmrc.gov.uk/news/rti-reconciling-paye-charges.htm

It is all very concerning and annoying that hours of extra work has been created.

The most serious question arising from my viewpoint is this:

"Why do two different departments of HMRC see different PAYE/NIC liabilities from a single correct FPS filing?"

HMRC, in the absence of an explanation, should admit that there is a system defect (= wrong figures at Collector of Taxes) and system design flaw in this respect (= two departments see different figures from one FPS filing).

Then there's the incorrect duplicate employee records issue causing defective code numbers to be issued (HMRC has claimed, in a letter to me, that this can be caused by putting a true / honest (historic) starting date on the EAS as opposed to a current date).

 

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By stratty
22nd Aug 2013 09:04

RTI Problems

Had a worrying conversation with collector of taxes recently who advised that even though an EPS may be submitted on the 19th of the month there is a risk that it will not reflect on the PAYE/NI liability for that tax month.

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