Real Time Information: HMRC answers critics

There have been a number of reports recently suggesting that as more employers start to report PAYE information in real time, HMRC’s real-time PAYE reporting system is starting to creak. HMRC’s Jane Brothwood explains why she is confident that Real Time Information (RTI) is defying its critics.

It’s almost four months since we started the roll out of RTI and it continues to go very well with more than 1.58 million PAYE schemes now successfully reporting in real time. This is at the top end of our expectations. More and more individual records start to be reported every day as the very largest PAYE schemes are now starting to join RTI.

As you would expect with such a big change, a number of issues have arisen for our customers, with most being resolved very...

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Comments
mr. mischief's picture

Surely a joke?    13 thanks

mr. mischief | | Permalink

"It is therefore important that employers remember that if they have not paid anyone in a tax month they should let us know (this applies even if the employer only pays HMRC quarterly) - this is easy to do, as explained on the HMRC website."

This is a lengthy website page with numerous sub-sections.  Doing nil submissions takes 5 minutes for each one - to ensure it has not been bounced because the database has gone AWOL.  We were told there would be no additional burden on small employers.

I have 30 of these per month, 5 minutes each.  I am doing directors' pay quarterly, so 8 nil months.  That would be 20 hours of extra work per year purely on nil submissions - can you confirm that if I raise an invoice for this time HMRC will pay up?

For 13-14 it is easy as there are no fines, I am simply not doing any of these stupid nil returns.  They are completely unnecessary, typical HMRC jobsworthiness.

For errors and glitches - 3 so far where clients which submitted P35s no problem, no changes made but RTI submissions bounced - I am not using the so-called helpline.  It's 20 minutes and you get to speak to someone who wants to do nothing to sort the problem.  So I've been writing letters, the first was in April and no reply to any of them yet.

If this is success please don't show me failure!

How about this one?    6 thanks

SimonP | | Permalink

Whilst preparing a client's SA 2013 Tax Return, I wondered why his P60 tax deducted did not correlate with his monthly payslips.

I also queried why the final tax code on the P60 differed from the latest P2 for that year (it showed a suffix of M1).

The reply from the employer said it all. He had been using Basic PAYE Tools and has since been forced to purchase proprietary software because of all the errors that the HMRC free tool makes.

Also, conversations that he had had with HMRC staff provided no conclusive answers as to why the errors had occurred in the first place.

This is an absolute DISGRACE.

mr. mischief's picture

Re-post from ICPA Facebook page    3 thanks

mr. mischief | | Permalink

No need to just take my word for this:

RTI: Amazingly HMRC are announcing how well they have done to get RTI to the stage it is at now, record number enrolling etc No mention that there is no alternative, no mention of the hours of work Accountants and payroll agents have spent educating and implementing RTI on behalf of their clients, no mention of the work undertaken by software developers to develop systems that Accountants, payroll agents and employers can use easily. Certainly, no mention of the costs small businesses have had to suffer as a result nor of the costs that Accountants etc have absorbed to keep fees to a sensible level. How about some genuine and honest output for a change? and as a thought if you think RTI was/is causing costs to rise for small businesses wait 'till you find out what work is involved and at what cost for auto-enrolment as your 100 payroll clients use say 25 different pension providers!! Just a honest thought."

This has been railroaded through in an arrogant fashion, and we all know where the finger of blame will be pointed when the mess which arises becomes visible.  As my earlier posts on this topic have indicated, the fun only really starts when large employers come aboard.

In many cases, their payroll will have been outsourced to the lowest cost supplier operating a rubbishly phone helpline service with staff who don't really know how to deal with tricky stuff.  In other words, a service exactly mirrorring HMRC.  So we're relying on these 2 operations going from a 2 out of 10 to a 9 out of 10 service if the problems are going to be fixed in any sensible fashion.

RTI    1 thanks

bugsyunners | | Permalink

I have three employers (all employing expats) where HMRC claims I filed an FPS in May way in excess of the amount shown on my Sage payroll software. I have written of course but all I have heard from HMRC has been the usual telephone call from a belligerent debt management officer who will not take my word that something has gone wrong. I ended up shouting at him! Just exactly how many employers is a "very small proportion of the total" and how many of them are employers of expats?

Pricing and penalties    3 thanks

kenatnam | | Permalink

It is slowly dawning on us that we are going to have to have to look at pricing for payroll services that we provide to our clients. We may actually just pull out altogether and let 40 odd clients find a new provider. Next year when penalties start coming in they will be disproportionate to the profit from running the payrolls. For some of our smaller clients we only needed to charge £10 or £20 a month, a bit of a loss leader perhaps, but with a possible penalty of at least £100 per month, an angry client to boot and hours spent on the phone to HMRC where is the incentive to run a payroll at a reasonable cost to a small business? Do I really need to do a risk assessment to confirm what my gut is telling me?

"RTI will be cheaper" is as terrible a misquote as "Peace in our time"

HMRC website    1 thanks

matthew pennifold | | Permalink

There is still confusing information about RTI on the HMRC website, for instance a new employer with staff below the NI lower earnings limit might find these pages:

 

http://www.hmrc.gov.uk/payerti/reporting/what-to-report.htm

says report everything even below LEL

 

http://www.hmrc.gov.uk/payerti/getting-started/register.htm#1

says no need to register for PAYE unless staff paid above LEL

 

Which is correct? The answer is that the first page does not tell the whole story.

HMRC would do well to review their pages to tidy up these loose ends. We wouldn't want to make it hard for new entrepreneurial businesses to start up - Cleggy might get upset.

RTflamingI

jiatbanus | | Permalink

For the uninitiated, inserting a syllable between two syllables is known (I believe) as "Temesis". I leave you to add your own syllable.

Who the hell do these people think they are?

Mr Michief is spot on, and I read no comments re Easy Peasy RTI.

I'm waiting anxiously for the first published RTI bypass. The complexity and cost of this abominable system is outrageous.

   

Moonbeam's picture

ATT letter of Engagement for payroll

Moonbeam | | Permalink

Anyone can go to the ATT website and download their letters of engagement, updated in Feb this year. Their 4 page letter of engagement for payroll is the one I'll be using from April 2014. It looks draconian, but we need all the protection we can get.

I may well be increasing my payroll charges rather more than usual, but am still thinking that one over.

Two way flow of information?

The Rogue | | Permalink

I thought that one of the supposed advantages to RTI was the two-way flow of information.

I have been faithfully reporting each week that one of my employees is on a W1 code.  We are his only employer but he was driving for an agency previously and W1 was on his P45.  I should get a tax code with ytd figures to use.

What I did get for another employee was a new tax code which was exactly the same as his old one.  Which I have been faithfully reporting each week.

Do they actually look at my returns?

I see a lot of Revenue bashing on this site which I don't agree with but RTI has had a negative impact on my job and it does not work.

Paula Sparrow's picture

Does anyone remember the introduction of Self Assessment?

Paula Sparrow | | Permalink

I recall that we spent two or three years having conversations with HMRC about how they had input the figures incorrectly and HMRC staff replying that was "impossible". The way the HMRC band is steadfastly playing the same tune while the ship is listing at the moment feels a bit like deja vu

So far this week I have had to deal with an employer scheme where the figures submitted for Month 2 differed by £20k to what HMRC say was submitted.  I can see the employer's records, I have no reason to believe that they changed anything during the submission process.  The Employer Helpline admits that there is a problem and have now removed their expected 6 week time scale for responding to the issue to no time scale because of the number of cases involved.

Then there is the client who received a threatening letter for failing to make monthly submissions, even though EPSs were sent in for April through to December back in May.

And the one that really made me laugh was asking the Agent Priority Line if they could send me details of a client's pension payments for Self Assessment and being told that some of them could be provided but where the pension payer was under RTI last year the details are not yet available on the records!  Seriously??????  I thought that was the whole point of introducing the flaming system!!!!

 

Happy 4-Month Anniversary for Tuesday, RTI.

danbrown | | Permalink

ken's "Peace In Our Time" quote from 1938 predated PAYE by only a few years. It may have creaked a bit, but after the best part of 70 years, anyone would.

Henceforth*, PAYE will refer to that apparently laughable old system that policy makers gloss over actually having worked, essentially unchanged, for decades.

RTI will be spoken of (while reaching for the garlic and crucifix) as the new one, that, no matter how much they pay their new IT man to switchitoffandonagain, won't.           (cf    IR and HMRC).

 

* but I'm resigned to it probably going the way of "fetch"...

The Rogue

jiatbanus | | Permalink

Hi. You say that you see a lot of Revenue Bashing "that you don't agree with".

From time to time I talk with my recently retired Tax Inspector/Trainer nephew. His attitude to IR /HMRC has done a 180 since when we first used to discuss his work. He jumped ship and went to work for an international corporation.

He is not a disgruntled ex employee, but he is a serious critic of their attitude to taxpayers, their loathing of Company Directors and the poor state and functionality of their IT.  

RTI & P45

Joseph_odriscoll | | Permalink

Virtually everyone knows what a P45 is. It must be just about the commonest firm in the payroll world...

According to the helpdesk we cannot produce P45's using basic payroll tools from HMRC.....

Who paid for the tools to be written?

 

bassett1's picture

No nil EPSs might be dangerous    1 thanks

bassett1 | | Permalink

Just a note to thank these commentators for confirming that I'm not in a parallel universe. The only reason that HMRC says there are a tiny number of schemes in 'dispute' - there is no dispute the figures that HMRC are holding are wrong if they are not as the the file was submitted by the employer - is that hundreds of thousands of employers will be blissfully unaware their figures don't match. they have no reason and no knowledge of the Liabilities and Payments Viewer that would highlight this, they pay their agent to do that but oh of course agents can't use the viewer until 2015 can they? Now that the final 16,000 largest schemes are live we may start to hear more noise on this as they are more likely to have in-house payroll teams who will be watching the viewer on 6th and 20th. If HMRC were confident about their figures they would be writing out to employers now with specified charges but have still chosen not to do so and only ring schemes with the largest discrepancies. And while we're on the subject of specified charges Mr Mischief if you don't do a Nil EPS even this year you will get a specified charge each month for each client of 1/12th of last year's liability which until the Nil EPS is filed is the legally enforceable charge for that tax month, so that might be more messy to deal wit than that tedious filing
Kate Upcraft, member of the now disbanded HMRC Customer User Group for RTI

P45

The Rogue | | Permalink

Is the Basic Payroll Tools meant to be payroll software or just an automated version of the tax tables?  It is free, after all.

mr. mischief's picture

thanks

mr. mischief | | Permalink

Thanks for the info.  By definition the only clients I am doing quarterly submissions for are precisely those clients - small limited companies with only directors on the payroll - which have a nil NI and PAYE liability for the year.

So a fine of 1/12 of last year's bill is no sweat.

mr. mischief's picture

Measures    1 thanks

mr. mischief | | Permalink

For me HMRC's reporting about this is all wrong.  The measure of how many people are complying is not the acid test.  We all had a gun to our heads, we've complied.

ACID TEST

How quickly are problem items being resolved?

i.e From original phone call or letter, how long does it take for HMRC to make a CHANGE to the database - as opposed to pretend it is someone else'e fault, fob you off to a different HMRC phone number, etc?

Because my estimate for this - based on my experience, my book-keepers' and postings to this site and others - is around TWO MONTHS.

If HMRC is measuring this and has a better number, post it up.  That number needs to be days not weeks not months - or the whole thing crashes and burns when the big battalions go live.

 

bassett1's picture

Why not an annual scheme then or no scheme at all?

bassett1 | | Permalink

Hi Mr Mischief
If the scheme has directors only paid annually then why aren't they set up as annual schemes so you don't have to do any Nil EPSs? hMRC can now take annual registrations again as their problem with that part of RTI is supposedly fixed

PAYE accounting periods?    1 thanks

dwaccounting | | Permalink

Does anyone know why HMRC are accounting for PAYE on a monthly basis - have just checked one of my clients and I can't believe the mess they have created with the allocation of payments and in only just four months! Okay client twice filed rti returns late, so assessment were raised but that can't justify allocation of their payments some of which have been split into up to nine individual payments, theses have then been spread across different monthly accounting periods. More bizarrely they appeared to have created additional payments (= to their assessment), though I'm sure there must be a matching amount elsewhere... Luckily this client keeps good records so in total I know everything is fine, but ingredients for real chaos! 

Schemes in dispute

Mike Nicholas | | Permalink

The only schemes in dispute are surely those for which HMRC have received a query/complaint from the employer (or pension payer)? Can HMRC produce statistics showing how many PAYE accounts are accurate? In other words, the tax etc due under RTI exactly matches the tax etc actually paid for each month and YTD. If not, the claim that there are few schemes in dispute seems to me misleading. The problem is how will HMRC establish exactly the tax etc due under each PAYE scheme?

Annual schemes..

Ian McTernan CTA | | Permalink

Hi Mr Mischief
If the scheme has directors only paid annually then why aren't they set up as annual schemes so you don't have to do any Nil EPSs? hMRC can now take annual registrations again as their problem with that part of RTI is supposedly fixed

This coming from the 'HMRC Customer User Group', even disbanded, tells me everything we need to know..

They weren't set up as annual schemes as one of the many problems that no one on the liason group saw coming or pointed out to HMRC forcefully enough was that many schemes would apply to be annual, so they STOPPED YOU BEING ABLE to register as annual and have only just lifted this ban.

In the meantime, most of us being good little soldiers did the first three months payrolls for all these directors, paying them 1/12th of the annual amount, as recommended.

HMRC have now said you can only register the scheme as annual if you only make one payment for the year- and since most of us have made THREE payments we now cannot register the schemes as annual until next year and have been forced into running these and producing payments or NILs for the rest of this tax year.

All from a problem that was highlighted to HMRC and the liason group months before April and which was ignored.

And no one believes the 'software glitch' story on annual schemes- if they had taken proper advice and been at all concerned about small schemes they would have ensured the system worked, but they were only concerned with large companies with their own inhouse payroll teams to deal with problems that arose.

bassett1's picture

Seems a tad unfair

bassett1 | | Permalink

I'm not sure how the customer user group are responsible for HMRC's IT failures. HMRC were made aware that there would be additional demand for annual schemes. My post was aiming to be helpful as I thought that was the purpose of the site. I assume you are a CIOT member in which case you will know your views are admirably represented by them?
On the point on annual schemes if you have made 3 payments then it isn't an annual scheme is it, rather if you have made three nil returns in the absence of being able to register as annual of course you can still register for 13/14 as you one payment month hasn't happened yet

What a lot of *****

jiatbanus | | Permalink

C'mon. Wake up and smell the coffee. The wrong people continue to push the buttons! We are discussing trying to justify a crap system that has skated around reality to meet the button pushers' aspirations. My office notice says just NMA. No More "A***s"! Regrettably, HMRC has no A*s in it. 

mr. mischief's picture

12-13 update    1 thanks

mr. mischief | | Permalink

Client just rang asking why he's being chased for underpayment.  The reason is we missed paternity pay off the P35, but having waited 20 minutes to be cut off in May, I then wrote on 8 May to inform HMRC of this.  No answer yet, going by the chasing letter I suggest HMRC have not even bothered to open the envelope yet.

If RTI had continued with separate phone numbers - which anyone bar a numptie would have viewed as essential - this one would have been nailed in May.  Instead here goes another letter to clog up the system.

Up and down the UK, how much of this will be going on just because the dedicated RTI line was trashed?  And how much more of it will start going in come October?

HMRC etc IT

jiatbanus | | Permalink

As I write I am waiting by my computer because a CT 600 submission failed. I phoned and sent the copy submission notice and I'm at at the computer at the relevant filing page waiting for the return call!

I didn't plan on a coffee break so I'm just using precious time that you can never get back. 

I know it's not relevant to RTI - or is it??

What were the corporations that got rich on HM Gov IT schemes. Mostly US, I guess, none of which paid UK tax or sat in front of Margaret Hodge whose government gave them the job. 

DMGbus's picture

iXBRL + RTI - two of a kind - extra costs for small businesses    1 thanks

DMGbus | | Permalink

jiatbanus wrote:

As I write I am waiting by my computer because a CT 600 submission failed. I phoned and sent the copy submission notice and I'm at at the computer at the relevant filing page waiting for the return call!

I didn't plan on a coffee break so I'm just using precious time that you can never get back. 

I know it's not relevant to RTI - or is it??

What were the corporations that got rich on HM Gov IT schemes. Mostly US, I guess, none of which paid UK tax or sat in front of Margaret Hodge whose government gave them the job. 

Absolutely relevant.

First the imposition of iXBRL language reporting for Corporation Tax - in my 30+ years experience something never encountered in small business, so it follows imposing extra costs.

Then we have RTI - the inability to report payroll data (and inactivity reports) on a simple webpage interface is bad for small employers added to the time cost imposition of having to make upto 64 reports a year (instead of as little as 1) in some cases.   Whilst the software costs might be modest, the time costs of learning RTI and making upto 64 reports a year is not.

So, TWICE HMRC have got way with imposing costs on small businesses with no truthful &/or accurate economic impact report.

A common factor is "big business influence" - potentially of benefit to big business therefore disregard / gloss over the problems (economic impact) for small businesses.

 

 

 

 

 

Paula Sparrow's picture

More RTI Problems    1 thanks

Paula Sparrow | | Permalink

It is now becoming apparent that the system is creaking at the seams already.

So far we have the incorrect demands for underpayments I have mentioned above, missing EPS submissions which have been acknowledged by the Gateway and the following problem that has been highlighted today:-

We have clients that need PAYE schemes solely for submission of P11ds.  There are no employees, only directors who take no salaries, but do receive benefits from the company.  It seems that at some point between submission of the 2012 P11ds and the beginning of this year, those schemes have been closed.  Submission of the 2013 P11ds has prompted a letter from HMRC advising that the scheme was closed and is being reopened, but we are now required to make RTI submissions for a non existent payroll.  Two additional returns have now been created as a result of RTI where none previously existed.  HMRC will not mark the record as not being within RTI and insist that it is simply a matter of filing an inactivity report, which we can do every 6 months.  The client will not be in a position to do that, so it presumably will fall to us, and the client will not be willing to pay additional fees for pointless reporting!

mr. mischief's picture

Me too!    1 thanks

mr. mischief | | Permalink

I got a call yesterday from a client.  She'd been called by HMRC to ask why she submitted a P35 for 11-12 and also why we'd been doing RTI for 12-13.

They claim the scheme was closed but this is just sheer drivel.  What a shambles!

I SAY AGAIN

jiatbanus | | Permalink

Since HM Gov and IR (HMRC) realised the advantage to them of forcing Internet useage on small companies and self employed persons, irrespective of time and cost, they have gone flat out to develop "their" systems with no concern to the likely impact on business. The 714 system was brought in to deal with The Lump. It now reaches into many areas of business that was not really its original intention of taking tax from subbies. We all knew where RTI was heading. Gordon's dream was that you sent HMRC your earnings. From total information received and projected, they deducted all perceived taxes and returned what was left. As the internet grows, so will these systems. Regretably RTI was probably "piloted" by the IT departments of big corporations. The only positive aspect of my prognosis is that I'm getting older.     

Same again

mikewhit | | Permalink

"So, TWICE HMRC have got way with imposing costs on small businesses with no truthful &/or accurate economic impact report."

Same happened with IR35 - they let themselves be pushed in the direction favourable to the bigger clients, rather than something like Netherlands' chain law which makes every link equally responsible.

RTI is inflexible

Sandra Silk | | Permalink

Working with small employers we try to be as flexible as we can to support them and their employees. 

Employees leaving early in a month and starting a new job in the same month have to leave their job without their final pay and start without a P45 because they cannot be paid before the RTI submission.  They will therefore have at least a month on emergency tax code or even BR if they have a second job.  This can massively affect their take home pay for at least a month and I have seen no evidence of a quick turnaround of tax codes from HMRC for new employees.  

RTI has increased the cost of payroll considerably for many employers who had part-time, casual or apprentice employees under the threshold who now have to be included just because there is one employee over the threshold.  

The submission of RTI returns before employees are paid gives no leeway for re-running payroll to make amendments - as we don't have access to all our employers' dashboards we have not yet been able to work out whether amendments to a previous return are being picked up.

RTI has definitely caused us far more work.

 

mr. mischief's picture

to be honest

mr. mischief | | Permalink

I am just ignoring all the daft HMRC rules on RTI.  I have just processed a July payroll yesterday, 28 August.

The client runs a Lake District restaurant which has been going flat out in the lovely weather, her father died in early August when I'd normally get the July data.

The rules on RTI are just plain stupid.  But do not worry.  When the big guns go live in October we'll get some heavyweight support for our views and they'll have to listen because Osborne's ear will be getting bent!

I can relate to that - one of

Mrs Muzzy | | Permalink

I can relate to that - one of my clients' payroll data got doubled up in May. every attempt to fix that since is only making it worse. Spent countless hours on the phone to various people in HMRC, to no avail. So, took drastic action - re-set the system to the initial set up, re-run payroll for each month without submitting FPS until the very last. It worked, but the time it has taken is my loss. Nightmare to say the least.