RTI is working in spite of mistakes, says HMRC

Despite mistakenly sending late filing alerts to 400,000 organisations earlier this month, HMRC’s head of personal tax reassured AccountingWEB members that the real time reporting system for PAYE is working as it should.

RTI boiled back to the surface on 7 February when dozens of AccountingWEB members started complaining about late filing alerts from the RTI generic notification system (GNS), when as far as they were concerned they had filed correct returns for the period to 5 February. They were the tip of an iceberg, as thousands of companies and advisers called software suppliers and HMRC to find out what they were supposed to do.

RTI continues to arouse intense interest and emotions within the profession. During the past three weeks, AccountingWEB items on RTI have been read nearly 20,000 times and more than 150 comments have been posted on the subject.

Against this backdrop HMRC’s director general for personal tax, Ruth Owen, met with AccountingWEB to discuss the issues raised by members.

Answering the first and most basic question about whether RTI was actually working, she said: “I think RTI is working very well...

Continued...

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420000 wrong letters

Kevin KashGone | | Permalink

Even with postal discounts that must cost £210,000.

Well there's plenty more of that stuff !! Just keep paying your taxes!!

mr. mischief's picture

They're 'avin' a laugh!    2 thanks

mr. mischief | | Permalink

I have in the past week detailed 3 examples where people have been on "bonkers" PAYE codes.  Those are just the bonkers ones as opposed to the merely wrong ones.  That's from one accountant who has 126 clients and has been gently steering away from PAYE clients ever since RTI started coming over the horizon 18 months ago.

"The current number of taxpayers who are affected by tax code errors stands at 20,000."

Either she has missed a couple of zeros off, has been told only 10% of the story, or is holding the thin red line until the Zulus pour through and everyone connected with RTI gets a spear through them.

Flash Gordon's picture

'Customers are getting used to it'    5 thanks

Flash Gordon | | Permalink

Customers are getting used to the fact that they'll randomly receive incorrect messages and will therefore ignore them. By random I mean that every so often they'll receive a spate of messages, all of which will be complete b*llocks, not that they'll regularly receive messages of which a fraction will be slightly not quite right. Of course should HMRC ever issue something that is correct it will have been totally ignored or deleted. But hey, that's fairly remote.

70% said it was better than they thought it would be - purely because they expected it to be utter b*llocks every single month - it's amazing how you can manipulate statistics when you want.

I could go on but quite frankly it's like banging your head against a large brick wall over and over. You can only wonder quite what Ruth 'I'm on another planet' Owen has been taking to be quite so deluded.....

John Stokdyk's picture

GNS messages - not letters

John Stokdyk | | Permalink

They're electronic messages that appear in employers' dashboard. So no cost is invovled aside from the electricty in sending them, but that also means they can be fired off more easily without officials being able to pull the plug.

taxhound's picture

Ha ha ha...    6 thanks

taxhound | | Permalink

I don't know whether to laugh or cry at this one.  If HMRC think it is working, they have a funny idea of working.

If only we could charge them penalties whenever they get something wrong or fail to do something on time.

I spend far more time on payroll than I ever used to.

Overambitious    4 thanks

WongR | | Permalink

To be honest - I do not think RTI the concept is such a bad idea.  But I do feel they have to be more lenient with the deadlines for filing.  The concept was created for the universal credit to which the implementation has been delayed.  In my humble opinion, all they need to do is to make the information submission for payrolls one month in arrears and HMRC would have information they need to make universal credit assessments to a sufficient degree of accuracy and the payroll operators will have sufficient time to collect the information necessary and iron out any problems that may have occurred.

 

In many ways there are so much more additional time and work incurred by payroll operators / accountants and business owners.  The least HMRC can do is at least make it easier for the people using the system.  I agree with a previous poster, I am a sole practitioner and currently the amount of time I expend on RTI is horrendous.  I'm musing if RTI means I will never have any holidays again.  They talk about using alternates - but due to the competitive world we work in, in reality it is not so simple for us sole practitioners.  

 

I wonder how the bosses at HMRC and indeed the regular staff at HMRC (used to their flexible work time and long holidays) would take it if we told them they can never have a holiday ever again (and if they do - they must be inconvenienced to where they can go).  Or that when they come back, they may have been demoted, and suffer a loss of income - such is the risk we sole practitioners may have if we use alternates?

Old Greying Accountant's picture

It may be ...    8 thanks

Old Greying Acc... | | Permalink

... working as it should, but that is not the way it should be working.

It is only working as it should because agents are bending over backwards to make an over bearing; over burdening; "we're cutting the red tape for business!" system work, and that is not what agents should be working on.

HMRC are the top half of the swan, agents and employers are the underneath paddling upstream like buggery against the floodwater swollen current.

mr. mischief's picture

It's a mess    2 thanks

mr. mischief | | Permalink

Below the surface, things are worse than ever.  I've seen more people on wrong tax codes - and been told about many others by my book-keeper - than at any time in the past 5 years.  When you consider what a mess HMRC got themselves into with people on the wrong PAYE codes during that 5-year period, you ain't seen nothin' yet!

The problem is compounded by the large number of incorrect employer records.  Much of this is HMRC's own making via "specified charges" which is made-up numbers to the rest of us.  the people at the top of HMRC don't have enough knowledge of the system to know how much sticky brown smelly stuff is poised delicately overhead.

Get ready for an attempt at the World Record for finger-pointing when their heads get immersed in it!

stepurhan's picture

Detail on the stats    2 thanks

stepurhan | | Permalink

@John Stokdyk

Ruth Owen is quoting some pretty optimistic sounding stats there. Are you able to find out exactly where those figures are coming from? Whenever someone quotes statistics in a way that supports their view, I always like to be able to check if the source material genuinely reflects that.

As Flash Gordon said, "easier" is a relative term. When trains break down, getting a rail replacement bus is "easier" than walking. That doesn't alter the fact that the replacement bus is still not a good choice from my point of view. I'd like to know how the question was phrased to get the 70% easier result.

this is a mess    1 thanks

sierrarain | | Permalink

seriously! these people should just be done with it!

Seriously????....    4 thanks

Kazmc | | Permalink

Did you laugh in her face when she quoted this little gem?..............

 

“Where we have had problems, and we have, we’ve tried to be honest about that and have listened to what customers have been saying, and we’ll work with anyone to resolve them.”

 

Unbelievable....

DISPUTED CHARGES    1 thanks

colinb | | Permalink

We receive 1 or 2 inaccurate notices to per month, HMRC tell me that a dedicated team is dealing with our disputed account but this has been the case for some months now, so not all disputed charges have been dealt with.  Unless you mean by passing the dispute elsewhere means that you have dealt with it Ms Owen?

A game of 2 halves    3 thanks

eddie the eagle | | Permalink

And it's our half that is working; 99.5% success rate of RTI submissions, that's the bit that we do. Then HMRC get hold of the date and mayhem ensues.

It is good of Ms. Owen to claim our performance as their success; the truth is that we are good at what we do because when we're not our customers go elsewhere.

HMRC have no incentive to be competent since their taxpayers have no where else to go. It would be nice if they made a bit of an effort and a little bit of honesty wouldn't go amiss. 

Overambitious    5 thanks

irbrbbas | | Permalink

I agree with all of this.

How many worthy HMRC staff are working at 00.05 on a Saturday morning, only to get a late filing notice for the Friday night from this crazy system. Surely reporting maybe 7 days after an actual payment is sufficiently Real Time for anything HM Govt needs the information for? But is HMRC listening?? No, and does it even care? 101% No!!

 

P45 part 2 and 3???

LesleyAnnM | | Permalink

A new employee gave me a P45 with a BR W1/M1 code which I used.  When she got her payslip, she contacted HMRC to get it corrected.  I processed her Feb salary and submitted it on 25/2/14.  She called HMRC on 1/3/14 and they told her that her employer needed to send in Part 2 and 3 of the P45.  I spoke to the helpline today to query this and was told that I was fine as I had submitted the information in real time and that the person who dealt with employees didn't understand how Real Time worked!!!!  The data probably hadn't been updated on the employee side of things.  What is the point of real time if it doesn't update all departments?  Surely no-one now sends in P45 part 2 and 3 any longer?

Of course RTI is working??    2 thanks

P&G | | Permalink

Why are we so sceptical? Of course RTI is working as HMRC expected. It is totally flawed as is everything else they do and say, and no one person is responsible for this fiasco, even better! When I complained about it I too was told there was a specialist team that were "monitoring the situation". I have asked on more than one occasion for an update on their monitoring, needless to say question is always ignored. 

MargaretThornton7's picture

RTI costs a lot more    5 thanks

MargaretThornton7 | | Permalink

We charge our payroll clients twice as much under RTI. as everyone above says, it takes MUCH longer. So much for HMRC saying we've all adapted - yes but at what cost?

 

Could we all bill HMRC every time we sort their mistakes?

Total Denial Based on Dodgy Numbers    3 thanks

Trethi Teg | | Permalink

Another example of the top people in HMRC a) not knowing whats going on and b) putting a spin on the whole position.

My understanding of the HMRC reporting system (based on inside information) is as follows: -

50% of HMRC offices (who are doing OK) provide statistics to head office which are massaged to look really good.

50% of HMRC offices (the ones not doing very well) dont bother to report. These "no reports" are ignored and not counted in the statistics.

As a result the information provided to the public and parliament etc is a load of rubbish, but sufficient to keep the HMRC brass in a job until they can pick up their pension, supplemented of course by a nice consultancy role in the private sector.

 

 

 

 

 

Could it be worse?

moneymanager | | Permalink

It has been said that a high personal allowance and a single rate of tax for evreyone and with no other allowances or deductions would raise more tax. A 'tax simplification' as radical as that could cause tax professionals (as well Her Majesty's Department of Apparatchiks) a few problems. Careful what you wish for!

Retirement plans

The Rogue | | Permalink

I work in industry and had in mind that when I retire I will set up a payroll bureau.  I'd do some charities I know for free and charge others to cover my costs and maybe get some pin money in.

Now, I'm not so sure and RTI is the sole reason.

There is no flexibility.  I currently do weekly and monthly payrolls and used to process weekly payroll on a Monday for the previous week to hit bank accounts on Tuesday.  If I took a week's holiday I could process on the Friday instead.  Now under RTI I must process it on the Friday.  Holiday has to be covered by someone else and I have no intention of being tied down like this in my retirement.

And HMR&C say it is better.  Apparently they suggest that the sky is blue but I am tempted to look out of the window for confirmation.

95% rate?!

Char | | Permalink

I might just only submit 95% of our tax returns next year if they believe this to be a sufficient target.  And I dispute the 20,000 incorrect PAYE coding notice figure.  We received over 30 last week and not one was right.  They should spend more time resolving the issues than making excuses for them.

stepurhan's picture

Source available?    3 thanks

stepurhan | | Permalink

Trethi Teg wrote:
Another example of the top people in HMRC a) not knowing whats going on and b) putting a spin on the whole position.

My understanding of the HMRC reporting system (based on inside information) is as follows: -

50% of HMRC offices (who are doing OK) provide statistics to head office which are massaged to look really good.

50% of HMRC offices (the ones not doing very well) dont bother to report. These "no reports" are ignored and not counted in the statistics.

As a result the information provided to the public and parliament etc is a load of rubbish, but sufficient to keep the HMRC brass in a job until they can pick up their pension, supplemented of course by a nice consultancy role in the private sector.

You say inside information, so presumably there is no publicly available source to back these figures up.

Because, without wishing to be rude, otherwise you are as much a person spouting statistics in support of your own view as Ruth Owen. Just because you are taking the opposing view, and it has some appeal to my own prejudices in the matter, still doesn't mean I'm going to just accept these figures as accurate.

Holiday and RTI    2 thanks

yeboyye | | Permalink

After the January rush we take a week's holiday. I knew I was going to miss Friday 07 February for my four clients.  Came back Tuesday 11 February and got RTI completed that night. Yes, I received four Notices.  I read one and deleted the others.  HMRC rang about another matter a week or two later and I raised the RTI issue. A heated argument ensued.  HMRC lady said I should train someone else to do RTI.  I suppose I could train my wife but then she usually goes on holiday with me.  Do these people live in the real world?  Woops, what's the time, ten to five, better turn my computer off I have to go home in ten minutes.

I got a penalty of 400 pounds    4 thanks

cramsden | | Permalink

I got a penalty of 400 pounds for what appeared to be one accidental late filing of a "no payment EPS". Luckily this was removed as the penalties dont apply this year.  However I have no idea why it was so much.  I also am not confident I really understand how to avoid them next year.  

I am a one person ltd company using HMRC SW who only occasionally has payments to make (I set the irregular payment flag). 100 pound penalty for employee count of 1-50 seems very unfair on the one person company!! effectively 50 times the penalty of a 50 person company!!.  

The EPS cant be made during the period for some reason so I have to report it between the 6th and the 19th of the next month.  A 2 week vacation can make this impossible.  I attempted to set future ones up and that failed with a 7861 bizarre error.  To set a future one up I appear to need to be able to set a current one up which cant be done. Catch-22!!

Some document says that penalties are only notified on a quarterly basis.  This is not fair as you could accidentally collect 3 X 100 pound penalties (probably X2 for tax and NI) before realising the mistake.

I am trying to do the right thing and notify on time but feel I am walking through a minefield (with the mines not being turned on til 6 april). 

I dont think the system is fair. There should be specific warning messages if deadlines are about to be breached.  It should be much easier to do the right thing. I talked to HMRC helpline about this. They just said that was how the system worked and cant be changed. Crossing my fingers for next year.

Yours 

scared in the minefield

 

 

jmleeco's picture

RTI returns when on holiday    2 thanks

jmleeco | | Permalink

I am a sole trader who does about 10 weekly payrolls and some monthly, and working on my own I am thinking about my holiday !  Does anyone know if its ok to do the RTI submissions while you are abroad as I have wifi where I will be staying and a couple of payrolls which I can't do in advance.  They should ask for the information monthly like cis up to the 5th of the month and submitted before the 19th, that would reduce so many problems for everyone.

kevinringer's picture

RTI would be a lot easier monthly in arrears    3 thanks

kevinringer | | Permalink

RTI & CIS are separate systems – but they are not: payments to HMRC are combined and most software (eg Moneysoft) runs RTI and CIS on the same program. RTI is reported in advance. CIS is very often reported in arrears. Clients are used to CIS in arrears and some are struggling to switch to RTI in advance. I understand that RTI is in advance because of UC – but self-employed will be reporting their figures in arrears so is it so important that RTI is in advance? I say it is not in which case RTI could be monthly in arrears done at the same time as CIS. What do other AW members think?

kevinringer's picture

Snap    1 thanks

kevinringer | | Permalink

jmleeco wrote:

I am a sole trader who does about 10 weekly payrolls and some monthly, and working on my own I am thinking about my holiday !  Does anyone know if its ok to do the RTI submissions while you are abroad as I have wifi where I will be staying and a couple of payrolls which I can't do in advance.  They should ask for the information monthly like cis up to the 5th of the month and submitted before the 19th, that would reduce so many problems for everyone.


 Great minds think alike - I posted the same comment at exactly the same time!

CIS refunds

razertoo | | Permalink

Due to the wondrous PAYE reporting system that is RTI, all of my construction clients' contractors will have submitted their CIS returns correctly and on time, and will match exactly the cumulative figures I input on the EPS and religiously forward to HMRC on a monthly basis. Therefore all of my clients who have overpaid will have their refunds by mid May.

If that happens I'll give RTI the benefit of the doubt but am I holding my breath? No. 

Total junk from HMRC as usual    2 thanks

MarkKing | | Permalink

Total junk from HMRC as usual.

Just had a client last week assessed for a trivial amount of PAYE and NI. I say trivial but when you have ZERO employees and have been religiously filing an EPS every month indicating no activity, it isn't really trivial for them to suddenly get demands.

What makes this worse is that whilst we are registered PAYE agents with 64-8 in place, the assessment comes from debt management who claim not to hold a 64-8 and refuse to speak to us.

Absolutely ridiculous to think this is working. Maybe for big business it is but not for our small ltd co's.

kevinringer's picture

Use AAM service    1 thanks

kevinringer | | Permalink

Forward every case to the AAM service at https://online.hmrc.gov.uk/shortforms/form/AAMIssue?dept. The AAM service is one part of HMRC that does work well and if they experience a high volume of cases with the same problem they will get things changed within HMRC.

Holidays    2 thanks

The Rogue | | Permalink

jmleeco wrote:

I am a sole trader who does about 10 weekly payrolls and some monthly, and working on my own I am thinking about my holiday !  Does anyone know if its ok to do the RTI submissions while you are abroad as I have wifi where I will be staying and a couple of payrolls which I can't do in advance.  They should ask for the information monthly like cis up to the 5th of the month and submitted before the 19th, that would reduce so many problems for everyone.

One of the glories of the internet is that you can do anything from anywhere in the world.  This is one of its setbacks as well but that is a whole different subject.

So, yes you can file from overseas.  But the fact that this improved system means you have to work while on holiday does change the definition of the word improved to my mind.

Tom 7000's picture

Yeah but...

Tom 7000 | | Permalink

You are charging the clients for the extra work arent you? So you are making some more money...so whats the problem...it easily  makes up for the loss in audit clients due to the change in limits and you dont need such high quality staff to do it. Just have to stay calm and carry on ;)

 

.

johnjenkins's picture

My Assistant

johnjenkins | | Permalink

reckons from our end RTI is easy to use. It doesn't matter what day someone gets paid it goes through on a Thursday evening or a Friday although we try and get everyone on monthlies. We totally ignore HMRC codings when we are 100% sure they are wrong. This saves us all the prating around and anyway why should we let HMRC know if they are wrong and they have all the information. They no doubt will contact us by letter at some stage and we will reply. We follow their guidelines then apply common sense. It's worked so far this year, can't wait for end of year - no P14's no P35's. I'm not so sure about not getting the £400 penalty notices though. If we get them we will have to call them "Ruthies. 

kevinringer's picture

Np P14s, no P35s    3 thanks

kevinringer | | Permalink

johnjenkins wrote:

 no P14's no P35's 

HMRC have been banking on about no P14s - but what about P60s? The only difference is you ran the P60 run twice putting P14 stationery in first time. We still have to run P60s. And no P35s! But what about the 52x FPS and numerous EPS that we have had to file? This more than makes up for the time saved because of P35s.

Tom 7000's picture

Be careful

Tom 7000 | | Permalink

 

You said

 

We totally ignore HMRC codings when we are 100% sure they are wrong. This saves us all the prating around and anyway why should we let HMRC know if they are wrong and they have all the information. 

 

That's practical but illegal...You could well get nailed by HMRC or a client on a technicality here.

 

 

We got caught with one where it was changed and then changed back and created no end of trouble for the client. So now we get them, we hold them in the to be checked pile, not ignored. We inform HMRC they are wrong and ask them to change them back. Only when they have been checked and the amendment through to recorrect or change are they then released to payroll dept.

 

So we have acted on them as directed...we were just slow...

 

Only way I can see of doing it

kevinringer's picture

Client approve year end return    1 thanks

kevinringer | | Permalink

Pre RTI we would get the client to sign the P35 as proof of client authorisation. But there is nothing to sign for EPS/FPS. What is everyone doing about client approval? Is anyone really sending every EPS/FPS to clients for approval? Or are you relying on good old fashioned trust – clients trust us to know what is needed and to get it right?

kevinringer's picture

Ignoring coding notices is risky    1 thanks

kevinringer | | Permalink

johnjenkins wrote:

We totally ignore HMRC codings when we are 100% sure they are wrong. 

Risky. I always apply them. If they are wrong it is up to the taxpayer to sort it out with HMRC. It isn't up to the employer or agent to decide what codes to apply and what not.

Approval    1 thanks

Kazmc | | Permalink

kevinringer wrote:
Pre RTI we would get the client to sign the P35 as proof of client authorisation. But there is nothing to sign for EPS/FPS. What is everyone doing about client approval? Is anyone really sending every EPS/FPS to clients for approval? Or are you relying on good old fashioned trust – clients trust us to know what is needed and to get it right?

Hi

We are printing out the 'Q&A' sheet (End of Year Declarations) and sending that for approval.

Just as time consuming as the P35's!!

johnjenkins's picture

As I see it

johnjenkins | | Permalink

we are under self assessment. Yes, of course HMRC can challenge, but are they really going to challenge when they know they are wrong (yes I know that can be the case). Even prior to RTI we used this method but only when we were 100% sure, which is 95% of the time. As we are doing the SA tax returns then it really is academic.

As far as EPS and FPS are concerned, we have to work out the wages/salary/cis, so hitting a button and sending it to HMRC is hardly time consuming.

Yes there are teething problems but overall it will stop a lot of "cash in hand" stuff and eventually, once agents are allowed more scope, we will all think "time saver".

How many of you thought SA was a waste of time then changed their minds?

stepurhan's picture

Do you live in the real world?

stepurhan | | Permalink

yeboyye wrote:
After the January rush we take a week's holiday. I knew I was going to miss Friday 07 February for my four clients.
So a client with weekly paid employees wants to know the weekly net pays, because they don't want over/under pay anyone by mistake. Tough because that week you are on holiday? Or should you not be offering a time-sensitive service if you don't have cover for your own absences? If you are able to manage getting net pays to clients then you are able to file RTI at the same time. The information for the two things is the same.

BKD's picture

Quite right, stepurhan

BKD | | Permalink

stepurhan wrote:

Trethi Teg wrote:
Another example of the top people in HMRC a) not knowing whats going on and b) putting a spin on the whole position.

My understanding of the HMRC reporting system (based on inside information) is as follows: -

50% of HMRC offices (who are doing OK) provide statistics to head office which are massaged to look really good.

50% of HMRC offices (the ones not doing very well) dont bother to report. These "no reports" are ignored and not counted in the statistics.

As a result the information provided to the public and parliament etc is a load of rubbish, but sufficient to keep the HMRC brass in a job until they can pick up their pension, supplemented of course by a nice consultancy role in the private sector.

You say inside information, so presumably there is no publicly available source to back these figures up.

Because, without wishing to be rude, otherwise you are as much a person spouting statistics in support of your own view as Ruth Owen. Just because you are taking the opposing view, and it has some appeal to my own prejudices in the matter, still doesn't mean I'm going to just accept these figures as accurate.

Anyone can come on here and reel of whatever stats they want. Without a source, it's just bluster.

johnjenkins's picture

Tony Benn

johnjenkins | | Permalink

used to do that on question time and the amount of times he got away with it. When you start quoting stats at people their first impression is "wow this guy/gal knows what they are talking about. However these days people believe very little anymore, and with good cause. 

My mum always told me...    1 thanks

norstar | | Permalink

...if you have nothing nice to say, then don't say anything at all.

However for this load of nonsense, I'll break that rule. This is a joke and so is any HMRC representative who comes out and says anything other than "RTI is beset with problems".

It's based on a perceived requirement for "on or before" which has been shown not to be true and which in the case of tips for example, is simply impossible to comply with. Their systems undermine agent/client/HMRC relationships. They ignore correspondence or at best take over a month to reply. Bizarrely, they seem completely unable to cope with weekly, two weekly or 4 weekly payrolls and when quizzed as to the answer, simply say "change your employees to monthly paid".

Tax codings haven't improved either - one guy emailed me yesterday and he's on D0 for his only job and pension despite earning £90,000 a year. His employer? BP. So despite "live" RTI submissions throughout, they've still cocked up his tax code two years straight.

RTI in itself is not a terrible concept, but the system is basically broken and not fit for purpose.

 

johnjenkins's picture

@norstar    1 thanks

johnjenkins | | Permalink

Understand your frustration. If you know the correct code then use it. Why bother with HMRC at all when they are cocking up. Let them chase you if they feel they are right. When compliance is wrong then it is time to correct it.

Cloud cuckoo land    1 thanks

njhceo | | Permalink

Having just spent the whole afternoon between the software and HMRC help line - you cna spot the problem a mile off.

Mine is a very simple payroll - two directors with one PAYE pymt made in Dec and one small monthly payment to part-time. Can't handle the one annual payment.

IT IS EXTREMELY OBVIOUS THAT RUTH OWEN DOESN'T HAVE A CLUE HOW SMALL BUSINESSES OPERATE. A SIMPLE PROCESS MADE EXTREMELY COMPLETED BY HMRC's OWN PROGRAMMING SOFTWARE. WHAT A NIGHTMARE. GOOD JOB THEY ARE NOT IN BUSINESS THEMSELVES AS THEY'D BE OUT OF ONE. PITY ITS HMRC.

Basically I'm having to spend my time as a Director sorting out a simple issue that should have been resolved way before this got launched.What were they smoking? (as opposed to what is she smoking now?)

One suggestion is to pay the over-amount now and then reclaim - surely you're not serious? Paying an amount that isn't due?

Don't call me Shirley - Leslie Nielsen couldn't have made this up......

Client approval... and saying goodbye to RTI    2 thanks

Nicki Sanday | | Permalink

Yes, pre RTI I did the same as you describe.  I understood that this complied with HMRC's general requirement for agents to have authorisation from clients prior to submitting returns (as well, of course, as protecting both the client and agent with regard to errors). The approval process was done using the postal system (contrary to popular belief, not everyone in the country uses email and, so far as I am aware, we do not yet live under a regime that makes the ability to conduct correspondence by email compulsory).  The P35 deadline was achievable, even allowing for holidays, illness, postal delays etc.  With the reduced timescale for submitting the final RTI returns, this will be much more difficult.  I will probably do similar to Kazmc i.e. print declarations, total tax/NI due and P60 details for the client to sign, send them as early as possible and keep my fingers crossed the authorisations arrive in time.  It doesn’t solve the in-year submission authorisation problem, but at least it is something.

On two separate occasions (around 12 to 18 months ago) at two different HMRC-run RTI seminars, I asked HMRC staff whether, under RTI, HMRC's requirement for an agent to have authorisation from clients prior to submitting returns no longer existed.  On both occasions they were unable to answer, but they promised to investigate and reply to my query by email.  I also pointed out that, for PI insurance purposes, I would need written confirmation of this fundamental change and an assurance that agents would not be held responsible for errors. Needless to say, I have not received any reply!

My solution for the long term is to stop doing payrolls myself and outsource them.  As others have mentioned, when you are trying to contend with all this on your own, the situation is untenable.  Surprisingly, I do actually have a life – and other work - outside of RTI and I simply cannot justify the amount of time and energy necessary to deal with all this s**t.  Not to mention the massively worse situation that will result from auto-enrolment.  Both my husband and I have suffered serious and ongoing health problems over the past year and these have made me realise that it isn’t worth trying to battle on with this idiocy and suffer the consequences – there is more to life and so I have chosen to prioritise health over income and stress.

Unfortunately, my decision will result in massive increases in costs for some of my clients, all of whom are very small businesses, often trading below the VAT threshold, making very modest profits and employing just one or two people.  In some cases, with the simplest payrolls, they will probably be paying around 800% more for payroll services next year than they paid pre RTI.  I simply used to collect the information at the start of the year, give them a schedule and tell them to let me know if anything changed, then check everything with the P35 etc at the at the year-end.  I charged virtually nothing because this was an easy add-on to doing the rest of the job and it helped the smallest businesses to keep going and keep providing employment for someone.

The combined effects of RTI and auto-enrolment mean that some of my small employers are considering retiring early (if they are fortunate enough to be able to do so), reducing their workload so they can stop employing anyone or going into partnership with an employee instead.  And I can’t say I blame them – I too feel just too old to deal with all this enforced high-tech stuff that costs a fortune and goes wrong all too often. If only retirement were just round the corner…

johnjenkins's picture

@Nicki    2 thanks

johnjenkins | | Permalink

I too have clients that have decided to end PAYE and either retire or reduce workload and income. Running a "one man band" business these days is not easy and I believe the powers that be are purposely making it like that. They do not want us, but they will regret what they are doing when it all collapses around their ears. Roll on the next general election.

@ johnjenkins    1 thanks

Nicki Sanday | | Permalink

Thank you John, I'm pleased to know I'm not the only one who feels that way!  I think we are indeed a dying breed and I certainly feel jaded by it all.  I also feel very sorry for some of my clients who are struggling to earn a living as it is and now dread future developments.  At least I have a husband who is semi-retired and now drawing his state pension, so I am lucky enough to be able to choose to let some work go.  I just hope an election will result in a modicum of common sense prevailing.

mr. mischief's picture

Find a way!    1 thanks

mr. mischief | | Permalink

This is my message to clients in this sort of position - find a way of not being a PAYE employer at all!

Granted this is not always easy, but overall it is worth the effort.  For those who will say "It cannot be done" I simply say:

We can put a man on the moon.

We can figure out there are more stars in the universe than grains of sand on the average beach.

We can find a way out of PAYE if we need to!  (A legitimate way.)

RTI

euanjohn | | Permalink

I would like to make three suggestions on how to improve RTI.

1.  The system should only operate for companies who have a P35 total PAYE/NIC of £100k or more.  Many one-man companies paying minimum salaries and dividends only pay £100 per annum tax and NI and yet receive numerous threatening letters during the year - the postage must cost more than the tax take.

2.  Frequently, when a threatening letter has been sent, it emerges that e client has paid, but the funds have been misposted by HMRC to either a preceding year or a suspense account.  There should be a rule in HMRC offices whereby before a letter is sent out, the account should be checked for apparent overpayments in previous years.

3.  HMRC's Basic Tools have various bugs and operational issues.  Clients who have tried using them have encountered problems which the "helpline" cannot or will not fix.  Therefore, they have had to buy third party software.  It is outrageous that the taxpayer has to pay to subsidise HMRC's failings.  There should be a reward/incentive payment - like there was for filing P35's electronically - to rescue a bit of goodwill from all the grief this sorry business has caused.

One might be forgiven for thinking that the ICAEW should be making these points - after all, we pay them enough to represent us.  Perhaps their relationship with HMRC has become a little to cosy and masonic.

 

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