RTI pilot puff slammed by experts

An HMRC review hailing the successes of the RTI pilot scheme met a storm of criticism from payroll and software specialists who do not take such a rosy view of the online PAYE filing project.

Written as a summary of “the tangible benefits that crystallised as the pilot progressed”, the HMRC pilot scheme report flies in the face of front-line user experiences and the comptroller and auditor general’s report on HMRC’s accounts, which detailed several flaws in the RTI implementation.

Rather than handling the expected flood of 250,000 employers by November 2012, the total signed up was 66,240. In spite of this and other shortcomings in the testing regime, the HMRC report concluded: “Overall, the pilot boosted confidence that the process worked well and provided evidence that it would reduce administration burdens for employers.”

The NAO had access to some of the same information as the internal HMRC pilot scheme report author, but did not reach the same conclusions...

Continued...

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Comments
frustratedwithhmrc's picture

Look at it from a project management perspective...    5 thanks

frustratedwithhmrc | | Permalink

In respect of the core criteria of for any project (time , money and functionality/quality), HMRC can be said to have met only one. They delivered RTI within the POLITICAL timeframe required, which is aligned to meeting timescales for the DWP's Universal Credit commitments.

This helps HMRC slightly and agents/taxpayers not at all.

mr. mischief's picture

early days    4 thanks

mr. mischief | | Permalink

In my view HMRC are still very much in cloud cuckoo land on this one.  The lack of a separate RTI helpline means that I quite simply don't bother calling with RTI queries, I stick them into the post.

Large volume employers go on to the system in October, that's when it all falls apart.

DMGbus's picture

Fundamental system flaws    1 thanks

DMGbus | | Permalink

Employers helpline can see FPS and EPS filing details - the breakdown and total figures to give correct liability.

Collector of Taxes sometimes can see different (higher figures) with no breakdown.

The really is a serious flaw and the system designers should be answerable on this issue.

Then there's the duplicate records issue - one employee will be issued simultaeneously with two PAYE codes (say 724L and 219T) for the same employer.     HMRC have recently said that this can be caused by employers joining RTI  on 6 April 2013 and completing an EAS and correctly answerring the date started employment (apparantly should have told a lie and said 6 April 2013 as employment start date).

DMGbus's picture

Reason why small employers joined first

DMGbus | | Permalink

mr. mischief wrote:

In my view HMRC are still very much in cloud cuckoo land on this one.  The lack of a separate RTI helpline means that I quite simply don't bother calling with RTI queries, I stick them into the post.

Large volume employers go on to the system in October, that's when it all falls apart.

That's probably why small employers were forced to join in April 2013 to try and test the system before large employers join 6 months later so that as system testers we and our clients can find system bugs for HMRC for fixing before many more millions of employees (of large employers) join the system.   It has some logic but doesn't ease our pain.

If ALL employers actually did join in April 2013 the resulting several million likely incorrect PAYE codings could have collapsed the system.    With small employers I can identify erroneous codes (eg. D0, BR, 724T, 219L) and ignore them (yes aren''t I rebelious and naughty!) and get things sorted - I can't see anything like this being possible with employers having hundreds or more of employees as it's just a gigantic number crunching exercise for large employers with human intervention / credibility checks of PAYE code numbers being impracticable.

Saving time for employers    2 thanks

CJMaslen | | Permalink

I have continued to deal with my own small payroll under RTI, using PAYE Basic Tools.  I have found this facility very clunky and non-intuitive.  My first submission failed, wasting hours of valuable time - telephoning the helpline, emailing  and trying to find out what I had done wrongly, if anything.  Eventually, I found on Rebecca Benneyworth's Accounting Web blog that there was a system problem with Basic Tools.  The Helpline had simply told me to keep on trying to submit and it would go through eventually. Several Accounting Web correspondents pointed me in the direction of proprietary software that worked well, but I thought, frankly, that it was HMRC's duty to sort out the problem.  Subsequently, HMRC announced a fix, and I was eventually able to submit the first 3 months' submissions in one go, in time to pay the first quarter's PAYE/NIC.  I was concerned about HMRC's software possibly corrupting other data on my systems, so had to jump through several hoops to make sure that it was properly isolated.  All this was very time consuming and frustrating, but so far RTI does seem to be operating satisfactorily for me. However, I am an experienced Chartered Accountant with good IT resources available. I am sure that there must be thousands of (particularly small) employers experiencing much greater difficulties than I have encountered.  The true hidden cost of RTI must be astronomical and yet we are told that it is more efficient and saves administrative time. I look forward to hearing what other correspondents have to say.                                                                                                              

frustratedwithhmrc's picture

This was pointed out when RTI was proposed    5 thanks

frustratedwithhmrc | | Permalink

CJMaslen wrote:
The true hidden cost of RTI must be astronomical and yet we are told that it is more efficient and saves administrative time. I look forward to hearing what other correspondents have to say.

The impact assessments for RTI took no consideration of the time and effort of accountants getting clients up to speed on RTI or resolving problems with RTI.

As far as HMRC are concerned, they don't pay for it therefore it is free.

The costs to UK businesses are massive and rising, for little ACTUAL benefit to accountants or clients.

mr. mischief's picture

double whammy

mr. mischief | | Permalink

I recommend various software to clients, and - including on my website - emphasise the importance of NOT using the HMRC software under any circumstances.  Two reasons:

1.  As you've pointed out, it's clunky and with no commercial pressure, error strewn.  No reports that are actually useful for the business, just for HMRC.

2.  On 4 separate occasions - 2 in self-assessment, 2 in CIS - HMRC have fined clients £100 for non-submission despite the fact that all 4 submissions were made well in time.  I used external software in all cases, and was able to send HMRC PDFs from the external software showing the HMRC date and time samp "Accepted".  So they backed down on all 4.  My point is that the HMRC database had no record whatsoever of any submission even being attempted, never mind made.

Just today a client e-mailed me to say HMRC had written to warn him of a fine because he had not yet submitted his P35 for 2012-13.  My answer was to attach a PDF of the April HMRC "Accepted" sheet and say:

"If the return has not been filed, ask HMRC why they sent us this from their database in April!"

I can't say often enough just what a bad idea using HMRC tools is.

mr. mischief's picture

one more thing

mr. mischief | | Permalink

I am getting on the front foot with every single error I pick up, writing letters to them and making sure they get sorted in the next two months.

In November, the system will be deluged with data from the big guys and all hell will break loose.  Us little guys can whistle from then on!

stratty's picture

HMRC Initiative

stratty | | Permalink

As is often the case with HMRC Inititiatives they are well intentioned but poorly executed.

P35 not yet submitted...    1 thanks

Ian McTernan CTA | | Permalink

I have several of those that have cropped up, and am ignoring them until they send a penalty notice out at which time I will send them the receipt from HMRC's own system and a bill for my time in resolving the issue- as clearly my client shouldn't have to pay for their own incompetence.

RTI is one big mess with zero benefits to struggling employers.

By the way can we now apply to register annual schemes again or have they still not sorted that out yet- my one man companies are a real pain to have to do a monthly submission for when it'sall pointless.

 

 

You are wasting your breath    1 thanks

The Black Knight | | Permalink

You are wasting your breath. HMRC are not listening.

They live in an altered reality.

this is nothing compared to what they have in stall for us with nest.

glynisbm's picture

Penalties?    1 thanks

glynisbm | | Permalink

No mention of the penalty regime for RTI; namely penalties for non submission and non payment(as a result of system errors) which will run concurrently.

My advice (and I can't stress this enough) would be to take screen shots of everything you do on screen. A bit time consuming I know, but worth it if you end up at a tribunal appealing against penalties.

Disaster

kenatnam | | Permalink

RTI is the biggest disaster to British business in the last 100 years and so many people in positions of authority are so disconnected from the real world that they don't even realise it.

Never mind tax avoidance by multinationals, we need Margaret Hodge on this immediately to prevent HMRC et al bringing British business to its knees 

I expect volume employers will mostly be OK.

ringi | | Permalink

-> Large volume employers go on to the system in October, that's when it all falls apart.

I don’t think so, it seem to be the small volume employers that have most problem, the large employers can afford well tested and supported software.

However the NHS will be fun, as it is normal for a nurse to be on the payroll of 2 or 3 hospitals for bank and some agents, as well as their main job.   But this is the client good it gives most benefits to for Universal Credit. 

Hopeless hopeless HMRC v RTI

NYB | | Permalink

Forget telephone calls. The quality of staff at HMRC is appalling even when eventually you MAY get through IF you can be bothered to hang on (which I suppose is what they want).. As agents the chances are we are wanting advice on the more unusual issues. They can never get to grips withwhat one is trying to get across and I feel that I know far more than them. A dedicated agent's helpline is needed with well qualified staff.

bassett1's picture

Large employers will definitely struggle

bassett1 | | Permalink

The NHS trusts were all in the pilot so we have ample evidence ,as do HMRC , of massive problems for large employers with inability to reconcile to the figures held on the liabilities and payments viewer, and yes both HMRC and employers can see these (wrong) figures that include YTD figures for all the erroneous duplicate employments created by HMRC software. The NHS also has huge problems with corrupted tax codes as a result of the duplicates and problems as has been rightly pointed out with NICs aggregation cases for staff with main and bank posts. Finally I was saddened that HMRC have amended the RTI pilot report as the commentary John reports about payroll software was not as first published where HMRC angered payroll software developers by blaming them for duplicate records. This version 2 (not acknowledged as such) is closer to the NAO report and says that payroll software is now fixed so laying the blame for corruption of FPS files squarely with HMRC systems. They knew this from April 2012 but ploughed on regardless and continue with heavy handed compliance calls demanding liabilities that cannot be substantiated. My hope is that they will at least agree to halt this compliance work until they can assure us , and the NAO , that they have fully accredited financial systems.

mydoghasfleas's picture

Puff the Magic Dragon

mydoghasfleas | | Permalink

What did you expect HMRC to say.  Didn't you know it has written the recommendations on bookcovers and film posters for years.

"A must see......" if you have nothing else to do on a wet winter Wednesday in Bognor

“The pilot allowed HMRC to thoroughly test" for about 5 minutes "in live running the vast majority of the IT" that was functioning - about 50% "before the full roll out from April 2013.”

"In the early periods of testing, there is an intense thirst for knowledge to support the understanding of whether or not things are going well.”  Translates as early on much time was spent coming to the realisation nobody had a bloody clue if it would work or not".

"This is being monitored closely to improve the interaction HMRC has with employers, and to update guidance when required."  We have been making it up on the hoof

Whilst the song apparently was not drug related, one wonders if the HMRC author had used resinous organic matter before taking up the pen.

Basic PAYE Tools

wrilliams | | Permalink

I find it incredible that Basic PAYE Tools does not even have a P45 function as yet.  At least pre RTI you could submit the details online and print off a P45.  Now you can't even do that despite the promise of an update by May of this year.  Instead you have to order a paper copy of a P45 from the HMRC website for manual completion.  They don't even have the decency to allow you to download a P45 for completion.  So much for "making it easier" for small employers.

Unbelievable.....    1 thanks

Kazmc | | Permalink

It is utterly unbelievable that HMRC can be allowed to put this sort of spin on how "well" RTI has and is processing.   The problems and subsequent workarounds we have had to take have taken quite literally 100's of hours of manpower to try and rectify. We had 150 client payrolls in the pilot and it was the biggest error of judgment I ever took putting them forward for it (luckily another 150 payrolls we put forward were rejected from the pilot). We are now live with 300 client payrolls and we as a Department have never been under so much pressure and stress due purely to RTI. Everything, from the time we joined the pilot in November, has been a complete and utter shambles.       The most baffling thing is that during the pilot there was a dedicated RTI helpline where the staff at least did know what they were talking about and what did HMRC do?........ disbanded it on April 6th 2013!!!!           I am ever hopeful that penalties for late/incomplete/incorrect submissions will be waived for 14/15 too!! We can live in hope......

Tom 7000's picture

@Frustrated with HMRC

Tom 7000 | | Permalink

@Frustrated with HMRC

 

The impact assessments for RTI took no consideration of the time and effort of accountants getting clients up to speed on RTI or resolving problems with RTI....Agreed

As far as HMRC are concerned, they don't pay for it therefore it is free....Well they had to pay for the bits at their end

The costs to UK businesses are massive and rising, for little ACTUAL benefit to accountants...disagree....well unless you are daft enougy to do it for free

or clients....Agreed 

 

But the big benefit to UK PLC is to weed out all those people claiming benefits and then having a job without telling the benefits agency...nips em in the bud.... and that seems to be working from what I have seen..... so good idea there.

own eyes?    1 thanks

The Black Knight | | Permalink

Tom 7000 wrote:

But the big benefit to UK PLC is to weed out all those people claiming benefits and then having a job without telling the benefits agency...nips em in the bud.... and that seems to be working from what I have seen..... so good idea there.

With your own eye's or is this another HMRC fib?

HMRC have clearly sunk to the bottom being deceivers and fraudsters.

Unfortunately you cannot trust a word they say. Not a good firm culture.

 

P45 on RTI

Lympete | | Permalink

The inability to print a P45 from RTI PAYE Basic Tools was brought to me by a client who had a leaver with no wage payment in 2013/14. Eventually, by entering a last pay date with a Nil payment and a leaving date, then submitting the data, the facility to print a P45 subsequently arrived on the employee record

Tom 7000's picture

@ Black Knight    1 thanks

Tom 7000 | | Permalink

No with my own eyes...

 

Company X took on employee Y

 

Employee Y tips up at work and says all my benefits have been withdrawn because you told HMRC I was working for you.....Director is puzzled and says...Ill ask the accountants...

 

Yep says me...thats RTI for you...

 

Employee Y resigns as he doesnt want to lose his benefits.....

 

Trus story

 

DISINGENUOUSNESS AND SPIN - A

sp7 | | Permalink

DISINGENUOUSNESS AND SPIN - A PERCEIVED EVERYDAY MARK OF BRITISH BIG BUSINESSES DEALING

WITH THE PUBLIC AND/OR MEDIA TODAY. WHY WOULD YOU EXPECT HMRC TO DEAL WITH THEIR CLEAR

IGNORANCE AND SHORTCOMINGS AS EXPERIENCED BY END USERS IN ANY OTHER WAY.

cool

The Black Knight | | Permalink

Tom 7000 wrote:

No with my own eyes...

 

Company X took on employee Y

 

Employee Y tips up at work and says all my benefits have been withdrawn because you told HMRC I was working for you.....Director is puzzled and says...Ill ask the accountants...

 

Yep says me...thats RTI for you...

 

Employee Y resigns as he doesnt want to lose his benefits.....

 

Trus story

 

Good!

I hope you considered reporting him.

Wonder if resignation entitles him to benefits anyway.

If it was tax credits there must have been a fraudulent claim.

Most of these claimers are cash in hand anyway and won't appear on RTI or will at a reduced payroll cost.

I can't see how RTI makes this difference (unless they would have previously have fallen below the form filling radar and lied on P46)

I can see it encouraging the popular standard £200 per week and we will make the rest up in cash approach.

Effect of late RTI processing on Working Tax Credit

Joss | | Permalink

@ Tom7000

Not sure this applies to your employee but I heard on a Tolley webinar today that if you process RTI late it can mean that DWP think your employees had no pay in (say) month 4 and double pay in month 5. This is because (unlike HMRC) DWP only take account of pay on the date it is reported to them, not the date it was paid. Consequently employees on low pay would get full benefits in month 4 and possibly zero benefits in month 5.

Annual schemes

Tiverton | | Permalink

Can we now tell them of annual schemes or are we still on hold on that ?

mr. mischief's picture

On large employers

mr. mischief | | Permalink

I've worked for a lot of large employers, payrolls of varying sizes from 500 to 10,000.  Payroll processing is an easy target at all times for cost reduction, often outsourced to people who have little or no knowledge of the actual businesses and staff they are dealing with.  Sometimes they are hundreds of miles away from the sites they are processing. Often they are difficult to get hold of when problems arise, as they are processing for many firms and have automated phone queues and inexperienced staff due to working to tightly priced contracts.

Does this sound familiar?  Apart from the tight contracts, is this not exactly how HMRC operate?

I expect the second half of 2013-14 PAYE to turn into a gigantic finger-pointing exercise when the system starts spitting out errors, duplications and duff tax codes to the payroll processing people, whilst hapless staff are caught in the middle.

I hope this won't happen but I am planning for it by ensuring I've got all my query items into the system and at least supposedly being sorted out before 5 October dawns.

8 weeks to open a letter

Joss | | Permalink

@ Mr Mischief.

Last I heard the SA & PAYE post was backlogged 8 weeks - just to get opened.

Apparently they now date-stamp the envelope on arrival and then the envelopes are left unopened in date order until they get to the front of the queue.

I know this because I've been tracking a gift relief claim (processed yesterday) that I posted to Liverpool in Feb.

Once opened, I'm guessing the staff first have to decide if the contents of the envelope are SA or PAYE.

I suppose my letter must have gone into the 'not sure' pile. It got lost and after a fair amount of chasing it was advised that they were unsure what type of claim it was based on their colleague's notes....we resorted to faxed communications - I just sent all the paperwork again.

If any of you have got rid of the office fax, I highly recommend 'efax' as an alternative. Its a bit pricey per fax if you don't plan on sending many but really handy - saves having to start the 8 week saga all over again. You just attach your docs to an email and send them via the efax fax server.

 

 

Could it be any worse for payrollers?    1 thanks

Kazmc | | Permalink

Joss wrote:

@ Tom7000

Not sure this applies to your employee but I heard on a Tolley webinar today that if you process RTI late it can mean that DWP think your employees had no pay in (say) month 4 and double pay in month 5. This is because (unlike HMRC) DWP only take account of pay on the date it is reported to them, not the date it was paid. Consequently employees on low pay would get full benefits in month 4 and possibly zero benefits in month 5.

               The pressure this puts the everyday payroller under is just staggering as we will now be responsible for benefits being payable to the most needy. It just fills me with horror what the implications of all this will be when we reach October :(

What evidence did testing provide?    3 thanks

BryanS1958 | | Permalink

The press release states that testing 'provided evidence that it would reduce administration burdens for employers'. 

 

I'd love to see this evidence, on what planet does having to do 12 electronic filings a year and keeping an eye on employee payment dates every month 'reduce administration', compared with the old system of making one online filing a year and not having to worry about when employees have been paid? 

RTI and Accounting

Peter Tucker | | Permalink

The PAYE End of year system had a simple cross referenceing system with the individuals annual Earnings etc. being provided on Forms P14 and the summary of these details being provided on Form P35, for each and every Employer / PAYE Reference in the UK.

This logic does not appear to have followed through to the new, more regular RTI system, since only the information relating to the Individual Employee is reported through to HMRC.

This means that HMRC do not have a complete weekly / monthly statement of individual and total PAYE information. They merely have a partial picture and therefore there are several Employers and Payroll Teams who are rying to explain to HMRC Debt Management that duff records do not actually means any underpayment in liability, something that other areas of HMRC would agree with, I suspect.

While recognising that the PAYE End of Year system was introduced in the 1940's, many would say that arithmetic and simple accounting has remained unchanged since those far off days, notwithstanding the amazing developments in electronic communications.

TomMcClelland's picture

A sensible design...

TomMcClelland | | Permalink

Peter Tucker wrote:

The PAYE End of year system had a simple cross referenceing system with the individuals annual Earnings etc. being provided on Forms P14 and the summary of these details being provided on Form P35, for each and every Employer / PAYE Reference in the UK.

This logic does not appear to have followed through to the new, more regular RTI system, since only the information relating to the Individual Employee is reported through to HMRC.

This means that HMRC do not have a complete weekly / monthly statement of individual and total PAYE information. They merely have a partial picture and therefore there are several Employers and Payroll Teams who are rying to explain to HMRC Debt Management that duff records do not actually means any underpayment in liability, something that other areas of HMRC would agree with, I suspect.

While recognising that the PAYE End of Year system was introduced in the 1940's, many would say that arithmetic and simple accounting has remained unchanged since those far off days, notwithstanding the amazing developments in electronic communications.

Indeed, a sensible design for phase 1 of RTI would have been to simply file 12 monthly interim P14/P35 sets. Such a design would have been trivial to add to most payroll software since the logic was already present. And the design is self-correcting month by month, and the user is aware of the total liability that they're filing for, rather than lots of oddments being added up to justify a total liability leading to the arguments that we're now seeing between clients and the accounts office.

But they had to have filing "On Or Before the Date of Payment" to support the political needs of Universal Credit, which as we speak appears to be going nowhere for 1,001 entirely predictable reasons. So the RTI specification ended up having the kitchen sink thrown into it.

IT Geeks

The Black Knight | | Permalink

It's what happens when you let IT geeks loose!

"Why do we need this?"" Because you can". "a practical solution""does it work?" "of course! what was it meant to do?"

Can you imagine the chaos when Geeks breed with civil servants?

We might even get drones with hellfire missiles checking on your walk home from the pub or enforcing speed limits with the AA.

Whoops what have I said?

There are no IT Geeks involved    2 thanks

eddie the eagle | | Permalink

HMRC thought that all they had to do was define the items of data that they required.

Everything else came later.

How many changes have there been to the list of data items? There is no logical structure and there is no change control (because there are no IT Geeks in HMRC).

How many different character sets are used in the validation for RTI? If you Google "FPS mig" and wind it through to the back end you will see that there are 5. How many IT Geeks are so pathetic that they define 5 different character sets for a single dataset?

I could go on ... and on and on and on but my mascara's running.

Contrary to the views of The Black Knight, what Government IT needs is to hand control to some IT Geeks and for civil servants and politicians to listen.

 

We have a word for RTI which comes from Captain Blackadder:

Captain Blackadder: You see, Baldrick, in order to prevent war in Europe, two superblocs developed: us, the French and the Russians on one side, and the Germans and Austro-Hungary on the other. The idea was to have two vast opposing armies, each acting as the other's deterrent. That way there could never be a war.

Private Baldrick: But, this is a sort of a war, isn't it, sir?

Captain Blackadder: Yes, that's right. You see, there was a tiny flaw in the plan.

Private Baldrick: What was that, sir?

Captain Blackadder: It was bollocks.

Listen?    1 thanks

The Black Knight | | Permalink

eddie the eagle wrote:

Contrary to the views of The Black Knight, what Government IT needs is to hand control to some IT Geeks and for civil servants and politicians to listen.

Listen?

What it needs is the civil service to listen to (INDEPENDENT) accountants then to make something simple that can work. It's really not that difficult! However there are so many insecure groups with vested interests in it not working that it will always be doomed to failure.

I have never seen an IT project do what you wanted it to.  Usually a load of S%$t is over sold that is no use to the user. All it does is create opportunities for criminals to thrive. Might be a breakdown in communication though so perhaps we need a translator too.

Concentrating your efforts on creating an unworkable system just for the purpose of creating penalty income from the law abiding merely supports the real criminals they ought to be dealing with instead.

I do like your other comments though!

RTI

njpandya | | Permalink

Two of the massive institutions in UK are fundamentally diverted from the purpose they were mean to deliver.

  1. Home Office
  2. Our truly HMRC

The above two are phenomenally famous for sucking the life out of life which is a rare talent.

Enough kidding!! In my opinion whenever I called HMRC, they sound more like a dictator and complete bureaucratic sounds like we are living in the realms of silent dictatorship. One thing I can promise even after 100 years you will find yourself on the same page with HMRC or public body; because one of the above post rightly said they live & thrive in different world.

Sorry HMRC & HOME OFFICE YOUR CHARACTER SUCKS!!

Lies damned and statistics

david5541 | | Permalink

 “Overall, the pilot boosted confidence that the process worked well and provided evidence that it would reduce administration burdens for employers.” Involving a mix of employer scheme sizes, different software users and payroll agents, the pilot allowed HMRC “to thoroughly test virtually all aspects of the new process between November 2012 and  March 2013…

“The success of the national roll out of reporting PAYE in real time so far is based on the solid foundations laid by the success of expanding the RTI pilot into live running.” 

 

hope fully by now those consultants(hired from the private sector no doubt) who are selling this idea have been fired!-there is too much use of consultants ta HMRC and the NHS-in all cases they are totally out of touch with those who are having to man the telephone lines of the PAYE helpline etc.etc. and "end users/agents" experience.

 

Even the national audit office disagrees with this report writer!

I agree with this statement:

Two of the massive institutions in UK are fundamentally diverted from the purpose they were mean to deliver.

  1. Home Office
  2. Our truly HMRC

The above two are phenomenally famous for sucking the life out of life which is a rare talent. 

just add to it the DWP!