Might be worth informing your local MP of the problems and then copying the letter to Ms Homer, obviously marked Personal, as well as Mr D Alexander MP. After all if these individuals don't know there is a problems, it probably wont get dealt with and as evidenced by the various posts in Payroll magazines and on this site, there are some problems which require attention ??
There are apparently several issues with the way in which HMRC determine if Payroll payments have been made correctly. Some of the beliefs which have been expressed by HMRC in the development of RTI were that Employers / Agents were withholding PAYE Income Tax and NIC's from payment in order to deal with cash flow issues.
The logic was that as PAYE was only formally balanced once a year, as long as the annual payment due was met by 5th April, the Treasury could be missing out on in year payments. Unfortunately, as with the claims of Employers providing "dirty data", HMRC were unable to provide any solid statistical evidence to support this claim, but as many have noted, failure to prove a theory does not always inhibit HMRC senior management.
The various PAYE & payroll publications have been suggesting that any correspondence from HMRC Debt Management regarding an allegation of underpayment of PAYE Income Tax etc. should be dealt with by immediately reporting the matter to the local Member of Parliament and copied to Ms Homer at 100 Parliament Street, London and a second copy to Mr D Alexander, c/o The House of Commons.
This may seem to be a rather heavy handed way of dealing with HMRC, but it has been pointed out that individual mutterings achieve nothing and as HMRC is a non-ministerial Department, the more members of Parliament are advised of the operational behaviour of HMRC, the more chance there is that a change may be brought about. No guarantees, but perhaps worth a try, rather than arguing with HMRC Debt Management teams?
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.
There is however a serious concern that with the £200 million allocated to HMRC for "digital development", we could be seeing another complete waste of money.
Anyone had an opportunity to look through the HMRC website to notify a change of private address? Several searches, followed by a set of seemingly endless questions, containing poor feild validation, culminating in .... well an onscreen message.
Exchequer secretary, David Gauke recently said when announcing the investment in Digital Service: “We want to give people the power to manage their tax affairs online as easily as they manage their bank accounts and this investment will allow HMRC to deliver a digital tax service fit for the twenty-first century.
Lin Homer said she was “delighted” at the news of the investment and said the department was “committed to doing business with our customers in the way they want to do it.”
Who has been asked what they want?
Being Internet Enabled does not mean being Internet savy. One wonders what proportion of " the 86% of the population who are digitally included " do any more than play Online Bingo or check out other specialist sites ??
The old PAYE system had, as part of its reporting system, two components. The Forms P14 detailing each Individuals pay, tax etc. and a summary of all Employees information, the Form P35. The Forms P14 passed information to the NPS system and the P35 information was passed to the Accounts computer systems. This allowed HMRC to determine the income of the Employee and calculate if sufficient Income Tax etc had been paid. It also allowed HMRC to match the figure of tax / NIC due and payable on the Form P35 with the amount actually received from the Employer.
RTI has failed to comply with this basic logic and chaos is ensuing.
We may have moved from the 1940's to 2013 but arithmetic remains unchanged despite various vested interests and electronic communications.
No Analysis !!! The fact that HMRC senior management noted the actual operation of PAYE /. Payroll just days before the mandatory implementation of a major change would seem to show that there was no proper analysis of RTI.
Unfortunately Ruth Owen is one of a series of HMRC managers and therefore the attribution of responsibility for cost, wasted resources and general failure, is again avoided.
As Ms Homer mentioned on BBC Breakfast recently, "we don't aspire for 10 out of 10" . Not a motto to which many organisations would subscribe ??
Interesting to note that according to details provided by HMRC at the following link:
http://www.hmrc.gov.uk/transparency/gpc.htm The annual payment for 2011/2012 from HMRC to Serco Assurance in respect of Website development and maintenance, amounted to - wait for it -
£42,629,307.38
A considerable sum of money for such an activity, and one should remember that this would be in addition to the costs of HMRC Staff actually involved in web content preparation or review.
I would urge everyone to listen to the Radio 4 PM broadcast of 5th Match 2013 - www.bbc.co.uk/pm - and 26 minutes into the program hear Linn Homer telling us all that there may be a few "chewy moments" when RTI begins in April. She goes on to say that RTI is a "well piloted scheme" and in essence all is well. The BBC reporter concentrated on the effect of RTI on small businesses and he is desperate to get the views and opinions of larger employers, as there is a suspicion in the non-payroll world that the arrival of RTI may not be as welcome as HMRC senior management believe. if you would like to express your views on the Pilot - in total confidence, with an Actor speaking your words then contact [email protected],
It is critical that if one has to file under RTI, every care is taken to ensure that the date the file is forwarded to HMRC is carefully thought through, since HMRC have not taken account of early or late payment and therefore may well attribute the PAYE payments to the wrong month, triggering a "where's the money" correspondence when in fact all is in order but HMRC have not posted the correct file to the correct month.
Extract from a converstation between members of the Public Accounts Committee and senior management of HMRC on 5th November 2012:-
Q116 Chair: Thank you. Let us move on to RTI. We are all worried about this, and no doubt you are too. What is the rating that you have got from the Major Projects Authority on your part of this project? What is your rating: red, amber or green?
Lin Homer: I think we were amber.
Q117 Chair: You are amber.
Lin Homer: We are being looked at, I think quarterly, by both the NAO and the MPA, and I think that is helpful1. It is a big, important project and it is very useful to us. The most recent one was amber, which is sort of where we would expect to be at the moment, with-
Q118 Chair: Six months before.
Lin Homer: But a lot of work to do still. The project has learned something from previous projects. We have approached this by building up from small pilots, but we are trying to stay open-minded to the views of committees, agents, employers about the things that we still need to think about before next year.
AND
Q142 Mr Bacon: What I want to ask you about is the stuff that will still go on at the other end. In paragraph 17, it says that the Department will still have to undertake an end-of-year reconciliation of each taxpayer’s record, as employers will not report all data monthly under RTI. "The Department needs to decide, taking account of emerging findings from the RTI pilot, on which changes notified under RTI it should update on taxpayer records in real time and whether it can carry out any of the work currently performed at the reconciliation stage earlier." Are you clear about any of that yet?
Lin Homer: We are still looking at that.
Q143 Mr Bacon: Do you know what changes cannot be made during the year?
Lin Homer: It is not particularly "cannot". I am sure it is value for money that the NAO is interested in. There are some changes that will become evident to us by more regular reporting that we do not need to do anything with until the end of the year. The NAO also did some work with us on the number of work management items that we can and cannot manage to do. Those that will automatically sort themselves we will not lift out and work at the first point that they become noticeable to us, so we will make judgments.
Q144 Mr Bacon: That will be your decision criteria-if it will sort itself out anyway, we will not do it. That is how you decide, is it?
My answers
HMRC RTI problems?
Might be worth informing your local MP of the problems and then copying the letter to Ms Homer, obviously marked Personal, as well as Mr D Alexander MP. After all if these individuals don't know there is a problems, it probably wont get dealt with and as evidenced by the various posts in Payroll magazines and on this site, there are some problems which require attention ??
Trouble with Payments & RTI ?
There are apparently several issues with the way in which HMRC determine if Payroll payments have been made correctly. Some of the beliefs which have been expressed by HMRC in the development of RTI were that Employers / Agents were withholding PAYE Income Tax and NIC's from payment in order to deal with cash flow issues.
The logic was that as PAYE was only formally balanced once a year, as long as the annual payment due was met by 5th April, the Treasury could be missing out on in year payments. Unfortunately, as with the claims of Employers providing "dirty data", HMRC were unable to provide any solid statistical evidence to support this claim, but as many have noted, failure to prove a theory does not always inhibit HMRC senior management.
The various PAYE & payroll publications have been suggesting that any correspondence from HMRC Debt Management regarding an allegation of underpayment of PAYE Income Tax etc. should be dealt with by immediately reporting the matter to the local Member of Parliament and copied to Ms Homer at 100 Parliament Street, London and a second copy to Mr D Alexander, c/o The House of Commons.
This may seem to be a rather heavy handed way of dealing with HMRC, but it has been pointed out that individual mutterings achieve nothing and as HMRC is a non-ministerial Department, the more members of Parliament are advised of the operational behaviour of HMRC, the more chance there is that a change may be brought about. No guarantees, but perhaps worth a try, rather than arguing with HMRC Debt Management teams?
RTI and Accounting
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.
Digitally Excluded
Interesting and thought provoking article.
There is however a serious concern that with the £200 million allocated to HMRC for "digital development", we could be seeing another complete waste of money.
Anyone had an opportunity to look through the HMRC website to notify a change of private address? Several searches, followed by a set of seemingly endless questions, containing poor feild validation, culminating in .... well an onscreen message.
Exchequer secretary, David Gauke recently said when announcing the investment in Digital Service: “We want to give people the power to manage their tax affairs online as easily as they manage their bank accounts and this investment will allow HMRC to deliver a digital tax service fit for the twenty-first century.
Lin Homer said she was “delighted” at the news of the investment and said the department was “committed to doing business with our customers in the way they want to do it.”
Who has been asked what they want?
Being Internet Enabled does not mean being Internet savy. One wonders what proportion of " the 86% of the population who are digitally included " do any more than play Online Bingo or check out other specialist sites ??
RTI System
The old PAYE system had, as part of its reporting system, two components. The Forms P14 detailing each Individuals pay, tax etc. and a summary of all Employees information, the Form P35. The Forms P14 passed information to the NPS system and the P35 information was passed to the Accounts computer systems. This allowed HMRC to determine the income of the Employee and calculate if sufficient Income Tax etc had been paid. It also allowed HMRC to match the figure of tax / NIC due and payable on the Form P35 with the amount actually received from the Employer.
RTI has failed to comply with this basic logic and chaos is ensuing.
We may have moved from the 1940's to 2013 but arithmetic remains unchanged despite various vested interests and electronic communications.
No Analysis !!!
The fact that HMRC senior management noted the actual operation of PAYE /. Payroll just days before the mandatory implementation of a major change would seem to show that there was no proper analysis of RTI.
Unfortunately Ruth Owen is one of a series of HMRC managers and therefore the attribution of responsibility for cost, wasted resources and general failure, is again avoided.
As Ms Homer mentioned on BBC Breakfast recently, "we don't aspire for 10 out of 10" . Not a motto to which many organisations would subscribe ??
What Cost ??
Interesting to note that according to details provided by HMRC at the following link:
http://www.hmrc.gov.uk/transparency/gpc.htm
The annual payment for 2011/2012 from HMRC to Serco Assurance in respect of Website development and maintenance, amounted to - wait for it -
£42,629,307.38
A considerable sum of money for such an activity, and one should remember that this would be in addition to the costs of HMRC Staff actually involved in web content preparation or review.
Chewy Moments !!
Chewy Moments
I would urge everyone to listen to the Radio 4 PM broadcast of 5th Match 2013 - www.bbc.co.uk/pm - and 26 minutes into the program hear Linn Homer telling us all that there may be a few "chewy moments" when RTI begins in April.
She goes on to say that RTI is a "well piloted scheme" and in essence all is well.
The BBC reporter concentrated on the effect of RTI on small businesses and he is desperate to get the views and opinions of larger employers, as there is a suspicion in the non-payroll world that the arrival of RTI may not be as welcome as HMRC senior management believe.
if you would like to express your views on the Pilot - in total confidence, with an Actor speaking your words then contact [email protected],
Just a Warning
It is critical that if one has to file under RTI, every care is taken to ensure that the date the file is forwarded to HMRC is carefully thought through, since HMRC have not taken account of early or late payment and therefore may well attribute the PAYE payments to the wrong month, triggering a "where's the money" correspondence when in fact all is in order but HMRC have not posted the correct file to the correct month.
OH Dear, We Are Amber !!!
Extract from a converstation between members of the Public Accounts Committee and senior management of HMRC on 5th November 2012:-
Q116 Chair: Thank you. Let us move on to RTI. We are all worried about this, and no doubt you are too. What is the rating that you have got from the Major Projects Authority on your part of this project? What is your rating: red, amber or green?
Lin Homer: I think we were amber.
Q117 Chair: You are amber.
Lin Homer: We are being looked at, I think quarterly, by both the NAO and the MPA, and I think that is helpful1. It is a big, important project and it is very useful to us. The most recent one was amber, which is sort of where we would expect to be at the moment, with-
Q118 Chair: Six months before.
Lin Homer: But a lot of work to do still. The project has learned something from previous projects. We have approached this by building up from small pilots, but we are trying to stay open-minded to the views of committees, agents, employers about the things that we still need to think about before next year.
AND
Q142 Mr Bacon: What I want to ask you about is the stuff that will still go on at the other end. In paragraph 17, it says that the Department will still have to undertake an end-of-year reconciliation of each taxpayer’s record, as employers will not report all data monthly under RTI. "The Department needs to decide, taking account of emerging findings from the RTI pilot, on which changes notified under RTI it should update on taxpayer records in real time and whether it can carry out any of the work currently performed at the reconciliation stage earlier." Are you clear about any of that yet?
Lin Homer: We are still looking at that.
Q143 Mr Bacon: Do you know what changes cannot be made during the year?
Lin Homer: It is not particularly "cannot". I am sure it is value for money that the NAO is interested in. There are some changes that will become evident to us by more regular reporting that we do not need to do anything with until the end of the year. The NAO also did some work with us on the number of work management items that we can and cannot manage to do. Those that will automatically sort themselves we will not lift out and work at the first point that they become noticeable to us, so we will make judgments.
Q144 Mr Bacon: That will be your decision criteria-if it will sort itself out anyway, we will not do it. That is how you decide, is it?
Lin Homer: That is one
Hey Ho what was everyone worrying about ?.