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Have you hit the RTI information gap?

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28th Jun 2013
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Accountants and payroll service providers are beginning to report minor misalignments with PAYE data submitted via RTI and cannot access the live figures to verify that they have reconciled clients’ PAYE records successfully.

Bacs service provider CreDec reported on the issue in a statement on its AccountingWEB supplier page and has liaised with ICAEW Tax Faculty chair (and AccountingWEB roving editor) Rebecca Benneyworth about the problem.

Under the security arragements on the government web gateway, once an agent has filed a client’s full payment submission (FPS) or employment payment summary (EPS) and received acknowledgement back of a successful filing, they are prevented from doing anything else; their gateway ID does not allow access to the client PAYE account for which they submitted the return.

One way around this information impasse is for the agent to log in to the employer’s tax dashboard to view the figures, but CreDec warned, “The majority of employer clients do not have access to the full picture on PAYE RTI, because bluntly, in their view, that’s what they pay their accountants for.”

Even where both sides have access to their respective data - the RTI returns submitted and the PAYE account balance of liabilities (including payments) - neither side can easily share this data without undertaking their own reconciliation exercise, the company warned.

“This is the PAYE RTI information gap and it’s where the profession’s attention is now turning after three months of real time reporting.”

If any issues do arise later with PAYE reporting accountants will have no advance warning until their clients tell them HMRC has contacted them about a discrepancy. “The challenge and cost of having to identify any errors in HMRC’s reconciliation of return data that was submitted in real time, potentially long after the submission, is likely to be significant,” according to CreDec.

Benneyworth responded: “They’ve got a good point. I’m starting to get feedback from agents and employers about apparent underpayments of PAYE arising because of how RTI is processed. Not everyone has got month-end cross-over right and are getting slight misalignments

“My concern for agents is they’ve priced up their service not anticipating this to be a problem. Obviously they had to check this when they were doing P35s - but to reconcile the figures on a monthly basis is not something they’ve costed in. I anticpated it was going to emerge as a problem - and funnily I wasn’t wrong.

CreDec’s suggestion that agents go into the client’s business tax dashboard to see the final figures would work, but Benneyworth thought it was not ideal to log in with the client’s ID.

The solution to the information gap will eventually come with the agent dashboard promised under HMRC’s agent strategy, which will show clients’ full tax liabilities. But it may take a couple of years before that is rolled out, Benneyworth warned.

Until then, she suggested waiting to see if the reconciliation issue settles down, but with an awareness that it could grow into an even bigger issue for PAYE service providers.

“It’s a little early to see if it’ll be a nightmare for the full year, but potentially it could be a big headache,” she said.

Replies (26)

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Derek French
By derek44
01st Jul 2013 12:05

HMRC Feedback

To not be able to see figures once they have been submitted boggles belief. What sort of eejits have worked at HMRC on this?

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By fpdbookkeeping
01st Jul 2013 12:25

Correct me if I am missing something here, but on my payroll software, it shows me the totals before I send them, so it is fairly easy to check. If they then make a mistake with it later on, it is a nuisance, but ultimately it is their job to check their own work. They don't pay me to do it. It would be useful to be able to check the figures online, but ultimately, reconciling their own accounts is their job - provided the data is submitted correctly, that is their problem.

Or am I misunderstanding the point of the article?

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Replying to TGG:
Tom McClelland
By TomMcClelland
01st Jul 2013 13:11

Reconciliation

fpdbookkeeping wrote:

Correct me if I am missing something here, but on my payroll software, it shows me the totals before I send them, so it is fairly easy to check. If they then make a mistake with it later on, it is a nuisance, but ultimately it is their job to check their own work. They don't pay me to do it. It would be useful to be able to check the figures online, but ultimately, reconciling their own accounts is their job - provided the data is submitted correctly, that is their problem.

Or am I misunderstanding the point of the article?

 

The problem arises when HMRC claims that the amount you owe for the month/quarter isn't the same as the amount your payroll software P32 is telling you.

We have seen several instances of this, but not yet a single confirmed instance where the payroll software was at fault or the amount filed was incorrect. But because all the accounts office and tax office seems to have is the total figures you can't tell *why* there is a difference between their demand and what you think they owe. And some accounts office operators take the (ridiculous) line that their system must be perfect therefore the error is the client or their payroll software. In one case the amount claimed by HMRC was more than 10x the client's P32 figure.

We've been advocating since RTI was first on the drawing board that there has to be the possibility of a reconciliation process, where the payroll software can draw back employee level detail from HMRC's systems, and compare that with the current P11s. Every time we suggested it, everyone agrees that the system needs this facility, but nothing ever happens.

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Replying to TGG:
7om
By Tom 7000
01st Jul 2013 13:12

Client log ins now Very Important

fpdbookkeeping wrote:

Correct me if I am missing something here, but on my payroll software, it shows me the totals before I send them, so it is fairly easy to check. If they then make a mistake with it later on, it is a nuisance, but ultimately it is their job to check their own work. They don't pay me to do it. It would be useful to be able to check the figures online, but ultimately, reconciling their own accounts is their job - provided the data is submitted correctly, that is their problem.

Or am I misunderstanding the point of the article?

I think the point is you tell the client to pay £22,345.67 PAYE. They pay this to the vat account and the 6,425.36 that is vat to paye. Because it doesnt really matter does it? Then they pay in £141.32 which is actually a notification of interest due on CT to them. Their personal tax gets paid to their wifes account and theirs gets paid to CT....and on and on

 

So someone has to sort it all out. So... if we can see whats going on its easy...

 

Yes the answer is here already  and its what we are doing....getting all the clients their own individual logins, recording the detals and then using that to access it. Bit long winded but needs must and all that.

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By Mallock
01st Jul 2013 12:24

It's Always Been The Same

Agents have never been able to get online details of PAYE payments and allocations which is frankly stupid beyond belief. We have several 2012/13 under and overpayment notices at present - how exactly are we supposed to tell the client how the underpayment for 2012/13 arose when we can't see what's been paid or allocated?

These cases can normally be resolved on the phone but at a cost the client often doesn't believe belongs to them (in particular when HMRC have used a bit of random allocation).

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By The Black Knight
01st Jul 2013 12:29

thought that was the objective

I thought that was the objective HMRC can't do reconciliations and don't see why we should have this option.

They have long refused to provide information from their end because we have this skill and they don't.

no reconciliation = no visible problem = government objective (problem elimination) achieved

Just another HMRC pigs ear did anyone actually believe it would work?

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By cherub
01st Jul 2013 13:08

My Accounts package works with the nominal link from Payroll, meaning I can check my figures instantly before I make the payments.  I always have checked my nominals before making any payment to ensure they are accurate.

BUT I can see what people mean, the HMRC should be in REAL TIME showing balances due right up to date.  What do they be doing with the figures?  Is it really that they have created something they did not think about before launching!

Another waste of time and money by HMRC!  I think everyone knew it would not work.

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By richardotley
01st Jul 2013 13:20

RTI

We have a number of ex armed forces clients who recieve a government pension  and second a earned income.

In the past we have had ESC A19 issues.

Last week I attempted to reconcile a client via RTI. HMRC informed me that Xfinity (the Armed forces pension provider) is outside the sope of RTI and not reporting. Therefore they cannot provide in year figures for my client although the pension is paid through PAYE.

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By susan2carter
01st Jul 2013 13:26

RTI Nightmare!

I have just hit my first reconciliation problem. One of my clients has accessed their business dashboard, which is showing approximately a £1200 overpayment.  However, the PAYE they have paid is in line with the figures I have provided.  

I telephoned the Accounts Office last week but they cannot give me a breakdown of their figures and suggested that I ring the Employer's Helpline, which I have still to do.  It's not a call I relish, that is when I do eventually get through and I cannot see the problem will be easily reconciled.  And this is only 3 months into RTI, imagine the nightmare at the end of the tax year.

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Replying to lionofludesch:
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By susan2carter
08th Jul 2013 16:44

RTI Nightmare

I finally got through to the employer's helpline, after endless games of telephone bingo.  Press this number and then that number and then another number and then wait in a queue for 20 minutes.  I still haven't managed to solve the overpayment showing on my client's online account.  The Revenue can't seem to reconcile their figures and have escalated it to their Newcastle office.  Interestingly the guy I spoke to said they had not yet processed the June FPS, even though I was calling on Friday 5th July and the FPS was sent online on 25th June.  Apparently they only update their systems TWICE A MONTH!  So what is the urgency when the Revenue say you MUST file your FPS on or before payments are made???

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By Mike Nicholas
01st Jul 2013 14:03

Several potential causes for discrepancies

In October 2012, HMRC implemented a new debt management system. It is inevitable that there are operational problems.

In addition, there are processing issues within HMRC's NPS system. For example, it is known that duplicate employee (and pension recipient) records are being created. One effect of this is inaccurate tax codes but another serious defect is the doubling up of YTD values for tax etc which will impact on the amounts that HMRC calculate as due for a tax period. This is because – unless HMRC have changed their computer processes – the tax due is determined by the movement in the YTD values from one period to the next based on FPS returns.

There are also timing issues. An EPS for say tax month 4 (‘July’) submitted on say 19 June will probably appear in HMRC’s system as relevant to June.

Looking beyond HMRC’s systems, there is plenty of scope for errors in software and payroll processing. I doubt that every payroll product is accurately performing RTI submissions. And if an adjustment is processed is this included at the right time in a FPS and in the calculations that an employer (pension payer) performs? Furthermore, some employers (and perhaps their agents) rely on the figures in the general /nominal ledger for identifying and making payment of tax etc to HMRC, but inevitably there will be errors here too.

In my opinion, this reconciliation problem is the most serious issue to have been identified so far under RTI. With hindsight, greater controls were (and remain) required – such as a P35-like summary for each batch of FPS returns so that any discrepancy can be isolated by HMRC with feedback to the originator.   

It seems highly likely, based on current knowledge and processes, that HMRC will not be in a position to establish with accuracy the tax etc due for many if not all PAYE schemes for any tax year. As a taxpayer I find this to be unacceptable.  

 

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Replying to JD:
Tom McClelland
By TomMcClelland
01st Jul 2013 15:03

Most serious RTI issue

Mike Nicholas wrote:

...

In my opinion, this reconciliation problem is the most serious issue to have been identified so far under RTI. With hindsight, greater controls were (and remain) required – such as a P35-like summary for each batch of FPS returns so that any discrepancy can be isolated by HMRC with feedback to the originator.   

...

Agreed. The equivalent of P35/P14 monthly would help.

The ability to file a DPS request asking for the details for HMRC's figures at employee level would be invaluable.

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By JDBENJAMIN
01st Jul 2013 13:55

Timing errors by HMRC

I have already had to waste two hours on one of these matters. HMRC booked Month 2's NIC figure into Month 1, as a result of which there was an apparent underpayment on M1 and a matching overpayment on M2. They were too stupid to see what had happened and only mentioned the M1 underpayment to my client, so it took about a dozen calls and emails between me, the client and HMRC to sort it all out. I told them in future to look at the totals for the year to date before claiming there is an underpayment. Meanwhile I have had to request logins for every single PAYE client to get around the problem of lack of access to PAYE payments through the agent login.

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By Tim Robinson
01st Jul 2013 15:10

Business Tax Dashboard

Would someone from HMRC explain why it is that agents can access much less information than clients can from their Business Tax Dashboard?  Some of my colleagues advocate not bothering with an agent authorisation when more information is available through the Business Tax Dashboard, just get the client to sign up and give us their login.  What price HMRC's 'agent view' of us when no 64-8s are in place so they don't actually know who we act for!

Rebecca - can you ask HMRC why it would take a couple of years for agents to be able to see what is already available to taxpayers - we all know that the current situation is ridiculous and to have to wait perhaps two years for it to be corrected is an insult.  This needs to be highlighted to HMRC in no uncertain terms.

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Replying to andy.partridge:
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By The Black Knight
01st Jul 2013 15:53

Awkward squad

Tim Robinson wrote:

Would someone from HMRC explain why it is that agents can access much less information than clients can from their Business Tax Dashboard?  Some of my colleagues advocate not bothering with an agent authorisation when more information is available through the Business Tax Dashboard, just get the client to sign up and give us their login.  What price HMRC's 'agent view' of us when no 64-8s are in place so they don't actually know who we act for!

Rebecca - can you ask HMRC why it would take a couple of years for agents to be able to see what is already available to taxpayers - we all know that the current situation is ridiculous and to have to wait perhaps two years for it to be corrected is an insult.  This needs to be highlighted to HMRC in no uncertain terms.

Because that's what the awkward squad do best. Make peoples lives awkward. Surprised you had to ask?

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By Joss
01st Jul 2013 16:56

yearly or monthly reconciliation period

For collection purposes, HMRC used to treat every year as a separate account. This used to cause issues because they could not automatically carry forward an under or over payment from an earlier period (year). And when you rang them, you needed to ask them to physically change screens to look in previous years in order to ensure they could reconcile to your figures.

From what I understand from this thread, it appears they are now treating every month as a separate account. This is simply not tenable. They need to treat each month's liability as one transaction in an ongoing account. A radical overhaul is required.

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By Cherry Matthews
01st Jul 2013 18:17

RTI Information Gap

As some have already pointed out some software and certainly Sage, which I use allows you to print off a P32 before submitting an FPS or EPS. Having been involved in payroll bureaux, my own and other practises for many years and am proficient in calculating payroll manually, I automatically check these anyway and find it hard to believe that some don't! HMRC are insisting that the month reference as well as the accounts reference should accompany the payment. The only queries I have had to date have been by clients NOT including these details. Regarding the Business dashboard, I agree as agents we should have access and whilst not perfect am in the process of asking clients to sign up and pass their ID to us to use. I agree whole heartedly that HMRC are far from perfect but we shouldn't blame them for our own short comings!! 

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By DMGbus
01st Jul 2013 20:11

P32 OK, HMRC correct once and HMRC wrong once - raises questions

The problem appears to be at HMRC end of the data handling.

Employers helpline wlll see the P32 (per software) correct total and breakdown of figures, but Collector of Taxes (and online liability) will differ with Collector of Taxes having no access to figures that Employers Helpline have (Collector of Taxes and online liability has no drill down to individual employees figures making up an alleged liability).

The questions therefore are as follows:

"Why can't Collector see Employer Helpine figures?"

"Why can't Employer Helpline see Collector figures?"

"Why does Collector see figures higher than the FPS minus EPS = P32?"

"Is HMRC at fault with their design specifications?"

"Are HMRC's software writers at fault by not following HMRC's design specs?"

"Or is just one of those things where no one is to blame as HMRC are using employers as guineau pigs to test their imperfect defective software?"

 

 

 

 

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By North East Accountant
02nd Jul 2013 09:52

Not rocket science

Why don't HMRC just have a PAYE account for each employer.

Employers submit FPS and EPS self assessing liabilities and all PAYE payments allocated to account.

In the real world this is what happens for all customers and suppliers. They have a statement of account.

While they are on they can do it for Corp Tax as well to avoid the idiotic system of a new reference every year.

Its not rocket science!

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By txcjg
02nd Jul 2013 11:45

Agents unable to view PAYE payments

It is not just an RTI problem, although RTI has made matters worse.

In PAYE overpayment cases HMRC have refused to provide details of how they have allocated payments and even refused to reallocate to a later year!

HMRC still do not understand that in many cases the agent deals with payroll because the client either does not understand or does not want to deal. The clients only involvement being paying staff and HMRC. In many cases small clients pay round sum amounts depending on cash flow.

The online helpdesk advised in April 2013 that HMRC has no plans to give agents access to PAYE payments.

An agent can see and reconcile CT and SA payments but not PAYE which is crazy. This makes additional work for both HMRC and the agent with additional costs for the employer.

HMRC need to update their systems sooner rather than later so that Agents can access PAYE payments.

Chris

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By kenatnam
02nd Jul 2013 12:30

HMRC live in a dream world

And HMRC famously told all employers that their payroll processing costs would come down under RTI.....

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By DMGbus
02nd Jul 2013 13:11

New problems...

 

Today I see that we have a notice that there are new PAYE codes issued (a list of perhaps 15 employer clients) ... good, I think, perhaps some of the coding errors have been put right ..,. WRONG...

...click to view new PAYE codes and get the message:

Displaying 0 - 0 out of 0 records for Tax year 2012/13 

(for dates 25/06/2013 to 02/07/2013)

so, change the dates (start 01/01/2013, end 02/07/2013) and get the message:

Displaying 0 - 0 out of 0 records for Tax year 2012/13 

NEW QUESTION:

"What sort of idiots do HMRC or their software contractors employ?"

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Replying to Tatadamer:
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By aburt01
02nd Jul 2013 14:22

wrong tax year

you appear to be looking at 2012/13, perhaps that explains why you can't see the records in June / July 2013.

If you can change the tax year to 13/14 you might see what you want?

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Replying to lme:
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By DMGbus
04th Jul 2013 13:08

HMRC now fixed their error

I was definitely looking at / requesting "current tax year" (I kept screen grabs to prove this).

However, by 3pm same day HMRC  had realised their error and have fixed it - I can now see the current tax year PAYE codes (and some of them look like being actually correct!).

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By stacey03
08th Jul 2013 16:09

Agent View

When we get the new "agent view" it will be an extension of the Business Tax Dashboard and you will be able to reallocate between taxes - which would solve some of the problems mentioned above too - like when the client pays the PAYE to VAT account. You will also be able to see the accounts for your authorised clients for the main business taxes, I have been told this also includes PAYE.

It won't be for a year or two yet though, so don't get too excited.

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Bee
By elpis.bs
19th Apr 2014 16:57

HMRC have mercy on us!

We too are under the impression that the online helpdesk advised last year that HMRC has no plans to give agents access to PAYE payments in the near future. 

Agents can access and reconcile other tax affairs and relative payments on behalf of clients enabling them to maintain accurate records thus avoiding unecessary penalties. This is not the case with PAYE and this is beyond belief.

Reconciling is one issue for the client, penalties are another. It would make sense and we feel would simplify matters if agents were to access the clients PAYE/CIS records. Correcting entries, re-allocating transactions, queuing on the phone endlessly or writing letters of appeals is costly to the clients but also to the Agents' reputation for best practice. Clients do not always see that the issue is with the absence of information from HMRC getting to their Agent.

So HMRC have a little mercy on us and please update your systems so that Agents can access PAYE payments and other important records. 

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