Real Time Information: The real agenda

Extra software costs and /or extra time burdens have already been successfully imposed on small business in the form of iXBRL for Corporation Tax filing.

iXBRL is a business / computer language NEVER used by small businesses, yet HMRC steam rollered this effectively alien computer language onto small businesses and accountants regardless.

No accurate cost  impact assessment was ever published prior to the imposition of this iXBRL trash.

Will this be repeated with RTI?   

Of course it will!

Has HMRC actually published figures to show how much more this RTI will cost small business?

No, it couldn't possibly do this as if accurately portrayed it would be seen to be the trash that it really is. (I think that I will call it iXBRL II).

Now, let's look at how out of touch HMRC are with the real world of small business - I understand that HMRC has stated that it believes that the majority of small businesses use BACS and therefore BACS is HMRC's chosen channel for submission of RTI data.  What idiocy!    Very very few businesses that I know use BACS.    HMRC may have realised this rather late in the day and I understand that it's now saying that some alternative will be offered to help non-BACS users.    Presumably this will be as time-consuming and unreliable as the HMRC software iXBRL pdf online filing offered to small limited companies for Corporation Tax online iXBRL filing. 

Ultimately, RTI, like iXBRL, will be beneficial to software vendors who may find that small business is forced to buy commercial software to deal with the ridiculous burden, when previously no such burden or requirement existed.  

that HMRC will only change or do things that benefit themselves with no regard to what effect it might have on others. This is not restricted to HMRC it is public service abound. When my sister worked as a civil servant she couldn't believe some decisions that were taken in the name of progress.

Just as with iXBRL, we are being treated with contempt - a sure sign that the public sector is now so large that it no longer gives a damn about those who pay its wages.

While we're probably now stuck with it, I would suggest that any one who actually makes donations to a political party deduct their iXBRL conversion costs from that donation, and make it clear that they have done so in a covering note.

Those who don't might consider sending a "donation" of £0 showing an amount equal to the iXBRL costs as the donation...

If there are enough of these "donations" perhaps the idiots in charge will wake up and smell the anger out here - and do something.

And likewise with RTI when it inevitably arrives.

Like many of those involved with payroll, I have some concerns about the tight timetable for rolling out RTI, and the logistics of getting millions of employers on board by October next year.  Nevertheless there are some good signs, not least that HMRC have been involved in long and detailed consultations with interested parties, including payroll software developers. As a consequence, while there are still some unanswered questions, we're going into the pilot with a good common understanding of what's required. This might seem like common sense, but it's certainly not always been the case in the past!

The need to report passport number seems to be causing a lot of unnecessary disquiet. Under the current plans it will never be mandatory to supply HMRC with an employee's passport number. The field is available under RTI but employers should complete it only if, for instance, it's available because the passport has been presented by a new employee as proof of their right to work in the UK (something employers have for some years been legally required to check for all new employees). There's no requirement to actively seek out passport numbers from employees.

As for the use of BACS, well, the original plan was indeed for the RTI information to be delivered to HMRC via BACS, parcelled in with the payment instructions, by those employers paying via BACS. This would have avoided the need for such employers to make a separate RTI submission. There was never any plan to make payment by BACS compulsory and there was always going to be the option of submitting RTI data via the internet for those employers not paying by BACS. In the event, sending bulk RTI data via BACS has been put on hold for now and it will be sent via the internet or EDI, as per the current P45, P46, P14, P35 etc.

The Revenue are unable to deal with correspondence within an acceptable time limit so how on earth are they going to deal with the masses of information being sent them on a weekly basis? We are told that this will enable them to correct PAYE codes in year - dream on!

If self-serve ever becomes a reality, then an employee's agent will correct the PAYE code so there's no need for any of their details to be sent under RTI.

The real reason, as explained in the article, is to facilitate the Universal Credit. So it looks like the tax credit fiasco all over again, where legislation will be made up on the hoof in order to meet a deadline set by the politicians.

Time and again over the past few years HMRC has fallen over its own feet due to IT project deliveries.

This was true of the Tax Credit's project in 2003, various aspects of Self Assessment, NIRS2, the list goes on and on.

For the most part the reasons for the IT project failures are the same:

• HMRC fails to understand the complexity.
• Milestones based upon political rather than deliverable targets
• IT Service Provider (EDS, Accenture, etc.) fails to develop a working system.
• Despite obvious failures system is implemented anyway
• Massive fallout on taxpayers and agents
• Large numbers of staff redirected from routine work to firefight issues
• Normal activities brought to a halt (phones/letters not answered)
• etc., etc., etc.,

So every IT failure at HMRC has had essentially the same characteristics, only the details change.

Finally, here we are with RTI showing the same initial symptoms (massive, but understated complexity, unrealistic 'politically-oriented' targets), I expect the rest of the list to appear in order. RTI will eventually be made to work in some fashion, but not without all of the familiar pain that we are used to with HMRC project failures.

I WISH HMRC WOULD CHANGE THE RECORD, BECAUSE THIS ONE IS SCRATCHED!

Anyone would think there was yet another hidden agenda at play here - a plan to make it so difficult to employ people that the entire workforce of the nation will either be unemployed or self-employed.

I am surprised that there is little comment on the amount of effort that businesses will have to make to ensure that the data required under RTI filing is accurate and up to date.  This would seem to require some sort of agreement between employees and employers to ensure the quality of RTI data, some of which may be in regard to persons in an employees household who have no direct connection with the employer filing the data! Are my concerns on this unwarranted?

on when HMRC lose all the data.

About 10-minutes after they turn the system on, it will start to leak like a sieve because everyone will want a slice of that pie, MI5/MI6, DWP, HM Treasury, National Statistics, Credit Reference Agencies, you name it, they'll want it.

up for grabs the sieve might even be built in.

At Sage we understand how disruptive RTI will be for employers and Accountants alike in particular the processes you all take in ensuring employees are paid on time and accurately.  We have shown particular interest in how we can reduce the burden on Accountants when processing and submitting for clients across a range of companies. 

At Sage we are taking RTI really seriously and have been working with HMRC for over a year now and will be participating in HMRCs 2 pilot stages(April 2012 to October 2012) and soft launch (i.e. early adoption Nov 2012 to March 2013).

Our Sage Payroll software update for the 2012/2013 delivered as part of our Payroll Year End pack is 'RTI Ready'.  We can seamlessly expose the RTI functionality as and when you move across to RTI whether this be if you are part of the pilot, soft launch or when you are mandated by HMRC to do so.

Accountants and customers alike tell us their No 1 requirement is to remain legislative compliant, and we will be doing this without passing on any costs to ensure you are "RTI Ready".

You can find out more on our RTI landing page (www.sage.co.uk/rti) and if you are a Sage Accountant and want to be part of the early adoption for your clients there is a link to sign up!!

what happens with wife's wages shown on many self employed accounts, say 2000 pa. way under pa and ni limit, what happens then

Without a de minimis  limit whereby the compliance costs are disproportionate, you will end up trying to get very small, marginal businesses involved in RTI where there is no significant potential for tax loss.

Completely pointless waste of everybody's time.

Companies which are below a certain level (measured on concurrent staff numbers or turnover) should be permenently excluded from RTI. Simple as that.

"Companies which are below a certain level (measured on concurrent staff numbers or turnover) should be permenently excluded from RTI. Simple as that."

That would be nice but, coming back to the original point of the article, these employees' earnings would be missing from the data used to drive Universal Credit, which might result in the individuals being paid benefit to which they weren't entitled.

This would be the Universal Credit invented by former PM and Chancellor Gordon "anti-Midas" Brown, which is so bureaucratically complicated that doing it manually each year costs millions in lost man-hours and several billion quid?

Scrap Universal Credit then.

Just stop taxing the lowly paid and then you don't need to give it back to them as a tax credit.

Cleggy will make with DC when Personal Tax Allowance goes up to 10K.

RTI is going ahead if we like it or not.  A major concern I have (and it's only one of a number) is this will affect every employer with a PAYE scheme, how are HMRC going to communicate with every employer what will be required of them?

There are some employers out there now that are still sending in paper P45's, etc to HMRC.  On-line in-year filing became compulsory from April last year.

With an issue as complex as RTI I fear they will struggle, and they cannot just penalise everyone for non-compliance because of their lack of communication.  The cynic in me says they will.

I had nearly 40 years’ Revenue experience, when I left nearly 2 years ago, and I do not believe that HMRC’s records are up-to-date enough to cope with RTI.  There are 2 main reasons for this, one being the basic reason that HMRC is not fit for purpose in that the level of staffing relies on everyone doing everything right at the right time, which will never happen.  This means that employers and payroll agencies need to keep the PAYE records up-to-date, as most records are not looked at by humans, and computers can only go by what they have been told.  My own experience was that the records of both my son and his girlfriend, who had the same employer, were some 15 months out of date when I was dismissed for gross misconduct for finding that out, even though I was looking into their employer’s failure to operate PAYE on all their employees. ( The disciplinary process in HMRC is handled by people who do not understand what an investigator’s job entails and so nobody is entitled to look at records of family and friends, even if they have a business need.)  It is not unusual for employers to forget to notify HMRC that they have a new employee, even though it is all on-line now.  I have recently received a current year notice of coding for my employment with HMRC, which indicates that the SA computer is communicating with the NPS system, as I had included an employment page for a payment received after leaving.

The other reason is that there are mistakes in the NPS system because there have always been incorrect National Insurance numbers, and the system relies on these to be correct.  Much work has been done over the years to correct them, but judging by the fiasco when they started using the system to clear the PAYE open cases in 2010, there is still a lot wrong.  Historically the COP records were set up in 1985 from handwritten concards which had been rewritten about every 8 years, and badly written letters were misinterpreted.  The problem has continued through human error in entering the details, and I have also known of cases of fathers and sons using each other’s NI numbers, accidentally or on purpose.

PAYE has worked reasonably well for over 60 years, and has meant that most of the work and expense is borne by the employers, so I doubt if HMRC has the resources to cope with it.  Links between the tax and benefits systems have been on the cards for many years, and have gone off at half-cock with tax credits.  HMRC needs more resource, including experienced staff.  I have said for years that when the likes of me were gone they would get the department they deserve!

There are serious problems with RTI for the main reason that HMRC have no commitment to check that the PAYE data they receive from Employers, which is to attempt to match it to their own computer records.

Assuming that a David Gauke was to start work, possibly in a Government role, the Payroll Team / Employer would be bound to notify HMRC of this event and to tax the employee according to the PAYE regulations.

Now let's assume that the handwriting of the HR team that inform Payroll is, well less than perfect, it is entirely possible that the Employees name would be read by Payroll as "David Gawke", and this would be part of the notification to HMRC. It could also be the case that a typing mistook had been made

HMRC are confident that this situation illustrates the "Dirty Data" problem which they face, since they would not be able to match "Gauke" with "Gawke" and a new record would be created or worse still the real David Gauke would find out that his employment records with HMRC was, shall we call it incorrect?

Steve Lamey, a Director of HMRC, famously mentioned in public that his name had been the subject of this type of scinario leading to him having multiple records.

The firm commitment of HMRC not to develop any fuzzy matching capability for incoming PAYE data, as clearly stated at the recent APPG Taxation meeting in Port Cullis House would seem to illustrate that HMRC do not beleive in co-operative development. Indeed the fact that HMRC refuse to publish the minutes of the RTI Customer User Group could be a cause for concern, along with the fact that the members of this "Customer User Group" are selected by HMRC.

How would RTI cope when as often happens in practice a whole quarters payroll is processed at once. Typical scenario is a clients employee is paid weekly but the payroll only needs to be updated quarterly when the paye is due - assuming of course the employee's pay remains the same for the full quarter which often - at least on paper it does.   As the employee is physically paid each week does that mean an RTI report needs to be made weekly when previously the payroll file only needed to be accessed and processed quarterly .    That could involve a serious amount of additional work.

Yes, I'm concerned about that too.

I typically do two months' wages at once and they rarely need amending for sickness or other reason.  If I need to handle the file every week, my charges are likely to increase fourfold or more.  Nice little earner for me ...... but can a small employer afford it ?

We have the exact same issue processing weekly payrolls with very little changes once a quarter.  HMRC have stated that a file needs to be sent either before or at the time of payment which now means a lot of extra work for us.

I have thought of a potential solution to this. HMRC require RTI information  ''either before or at the time of payment'' .    We know how easy it is to copy the forst weeks payments on April 6 We

We know how easy it would be to copy the first weeks pay for w/e 6 April to the rest of the year ie the other 52 weeks. Why not do this and send the file to them. Any amendments can then be rectified later even at the following year end. Result: payroll only really processed twice a year

That depends on how easy it is to make amendments .......