The PAYE farce: Simon Sweetman's verdict
Last week's PAC report held few surprises for Simon Sweetman, but this one might have a final twist in the plot.
The Public Accounts Committee report on HMRC’s 2009-10 accounts give HMRC a good kicking over the effects of the introduction of its new computer system. The committee is chaired by Margaret Hodge but has a majority of Tory members.
Sadly, MPs are particularly adept at kicking a man when he is down and often rather less willing to have a go at the powerful.
The Committee said the department has not delivered an acceptable standard of service to PAYE taxpayers and failed to collect tax that is properly due, caused uncertainty to taxpayers and treated them inequitably. Much of this is true, though it fails to mention that it has equally failed to deliver an acceptable standard of service to other taxpayers, with only large businesses seeming to be happy with the service they get.
The usual response from our listeners seems to be to call for the head of Lesley Strathie or Dave Hartnett or Old Uncle Tom Cobleigh (since these are the names that people know). But are they really the right candidates for the guillotine?
And now, as we know, HMRC is continuing the process of modernising PAYE for the 21st century through the introduction of Real Time Information (RTI). This, they say, will help reduce the need for reconciliations in the future. Some of us have had severe doubts about HMRC’s ability to manage this on top of everything else.
Continued...
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RTI - step too far too soon
Hi Simon
I'd quite agree with your concerns about HMRC's resources to deliver RTI in the timescales they have been given by DWP. This is a much bigger project than online filing for PAYE and that took years to implement and only involved direct links to HMRC from employers via the gateway or EDI. RTI requires all the banks, all the BACS intermediaries, employers, software providers and HMRC to be ready to go live with RTI in just over a year and for the full rollout to be completed in 18 months. Bear in mind that they have been given just £100m to deliver this on the back of dwindling human resources and the NPS that is not yet stabilised - the number of incorrect 10/11 tax codes issued in the last few weeks now P11Ds have been processed bears witness to that. If the timetable is immovable because of the universal credit timetable we need to strap ourselves in for a bumpy ride.
Have I missed sumfin?
We are in the whirled of self-assessment, so all HMRCy has to do is change the “require SA return” flag to “YES”, for all tax-payers with open PAYE tax years and issue millions of letters to them requesting SA returns - thereby neatly out-sourcing the reconciliations to the tax-payers?
Lagacy balances and carpets
This seems a bit nerdy, but I looked these figures up because we were discussing that at the ATT technical committe.
The "heaps of balances" that have built up have been quite evident - for many years. If you go back through HMRC's acccounts you will see that what Dame Lesley refers to as "legacy balances" - in other words unreconconciled PAYE cases were 7 million at the end of 04/05, 12 million at 05/06, 13 million at 06/07 and 18 million or so at 07/08. Changing the statutory timelimits is a bit like making the carpet bigger - you can sweep more underneath it.
One thing that the PAC did observe was that the full cost to the Exchequer of all the on-going drama at HMRC is "unquantifiable". I agree with you Simon I think it is about time someone sat down and did a reconciliation here. All very well cutting costs, but can we afford to write off so much?