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RTI Returns & Universal Credit Issues

Universal Credit not recognising HMRC information

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I'm just wondering if anyone else has ran into the same issue as I have.  Basically, to cut a long story short, I registered a client for PAYE in December. Due to several factors, lost mail etc I received the PAYE reference codes in Feb, filed the returns for the Nov, Dec & Jan months straight away and the Feb month end salaries when they were due. One of the employees recived notification that she was losing her Feb Universal Credit payment because she earned way too much money. Turns out Universal Credit took the 4 months' RTI returns filed in Feb, added them all up, decided she was paid 4 times the usual ammount and cut the month's Universal Credit. Of course she fought it, sent payslips etc but they are refusing to budge, she has been informed she's lost about £200 and she just has to suck it up. 

I spoke to Universal Credit on her behalf, explained the the 4 returns filed Feb were actually for the Nov-Feb period and the staff member admitted their system was not the same as HMRC's in that they cannot differentiate between the pay periods, they just see the date the information was uploaded and what the figures are.  I asked how that would work with the 'on or before' rule, wherein we could file early - I can forsee a potential issue where an early filing for a weekly paid employee may falsely inflate their monthly figure resulting in lost benefits for that period. I failed to get an adequate response other than 'just file on the payday then', even if that means working 7 days a week. I don't think so. It appears with Universal Credit its not a case where the money you may lose one month due to an early RTI filing is made up the next is your pay drops a bit, it seems to be geared towards paying less out.  I don't fully understand the ins and outs of Universal Credit as yet but from what I've experienced so far payroll providers now have to be careful when filing to HMRC due to Universal Credit's crappy systems not getting the full picture from HMRC. The employee in question fought them tooth and nail to try sort this matter but it appears to be a classic case of 'computer says no'. 

Anyone else come across this yet?

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By Matrix
14th Mar 2019 19:47

There was an issue at Xmas where claimants lost credits since two pay cheques were in the same pay period which lead to HMRC relaxing the on or before rule.

It is a load of rubbish given RTI was put in place for this very system.

I would take it forward if you can and it doesn’t take up too much time.

Maybe refer to Taxaid or CAB or her MP.

Or go through the PAYE helpline and ask to speak to an RTI technical adviser and ask how the claimant recovers the money due to the delay in receiving the reference.

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By Jane Evans
14th Mar 2019 22:19

This is a known problem. See the following articles:

https://www.litrg.org.uk/latest-news/news/190225-universal-credit-paymen...

Here’s another article about the problem this year when there will be a week 53, and also because 6 April falls on a Saturday so some payments will fall on the previous Friday which is in a different tax year.

https://www.accountingweb.co.uk/tax/hmrc-policy/last-minute-rti-easement...

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Replying to Jane Evans:
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By vodkaqueen
15th Mar 2019 13:03

That's a helpful link Jane, I've contacted the employee and put her on to that. She understands finance, she has an accountancy background and is going to appeal using that information. Trying to speak to these people is like banging your head against the wall, they can't give coherent answers just repeating they can't change policy. This judgement shows they don't understand what their policies are.

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Replying to vodkaqueen:
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By vodkaqueen
15th Mar 2019 13:38

Found this in the high court judgement ". If there is pay data there, it will be transmitted immediately from HMRC to DWP if the ‘payment date’ falls within the assessment period. The correct completion of the ‘payment date’ field on the Real Time Information submission is therefore key in allocating earnings information to an assessment period." - I haven't actually changed the pay dates, they are all dated for the month end, I've just double checked the RTI returns yet Universal Credit are going by the filing date and taking that as the pay date. What a mess.

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By neiltonks
15th Mar 2019 11:20

The Universal Credit system can't cope with this. Like many government systems it seems to be based around the simplistic assumption that everyone gets paid at regular intervals and variances, mistakes etc. never happen.

We now have the situation that HMRC (who're not the architects of this misfortune, incidentally) are having to tell employers to pretend on the FPS that payments were made on the regular date, even when they're not, in an attempt to limit the damage.

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By vodkaqueen
15th Mar 2019 12:52

Thing is I hadn't actually changed the pay date, I just reported it late due to the delay in receiving codes and that was enough for Universal Credit to wrongly assume the employee was paid 4 times in one month. The correct information has been reported to HMRC, I can see on their system the payments are allocated to the correct months but Universal Credit are refusing to accept that. They say the reporting date is the pay date.

They did remove her first month's pay as they, apparently, allow an employee to upload a payslip for the first month when in a new job but they refused to reallocate the others to the correct basis periods.

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By PBH64
24th Apr 2019 12:56

Part of the problem is that you, for reasons possibly outside your control, paid her for Nov, Dec and Jan and reported these in February. In her Nov, Jan and Feb UC assessments she will have received earnings and full UC. You send in the Feb FPS and HMRC send that to DWP. The UC system looks for the latest FPS, February, and the last one that it used. In this case there isn't one. Over the four months it is possible the correct amount of UC has been paid. Whose fault that she has had her cash flow mangled is an interesting question.

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