HMRC still says the incorrect liabilities showing on many PAYE accounts are all the fault of the employer or tax agent.
In mid-December HMRC published Agent Update 57 - it was not a cheery Christmas message. That bulletin includes a long section dedicated to telling agents how to run payroll for their clients, drawing attention to all the things that we still do wrong after nearly four years of PAYE under RTI. It’s remarkable that so many payroll professionals are still in business, if we really are so incompetent.
Last week was a fairly typical week, I travelled around the UK meeting agents and employers helping them with everything from basic payroll to the complexity of salary sacrifice. The people I met were from very diverse sectors and sizes of business, but there’s always one icebreaker that gets them talking about shared experiences.
I normally ask if anyone has had a PAYE scheme with incorrect data and how difficult the inaccuracy has been to resolve. Whatever the size of group I usually find an employer or agent with a story about the reputational damage to their business and their own professional standing, as a result of HMRC’s PAYE data not matching what was submitted.
The Agent Update no. 57 contains a link to the GOV.UK page: ‘fixing problems with running payroll’. Even the title sets my teeth jarring: The vast majority of employers and agents don’t have problems running their payrolls. They have been doing PAYE since the 1940s and you can be sure that if they weren’t able to pay people accurately and on time employees (and clients) would vote with their feet.
The GOV.UK page helpfully suggests a list of things to should check if “your PAYE bill isn’t what you expected”. What all of us have a right to “expect” is that the data that we send is the data HMRC receives and then displays back to us. It shouldn’t be a lottery where we wonder what the PAYE account will look like this month once the data has been processed.
It isn’t yet possible to check PAYE liabilities in real-time. We have to wait for the business tax account to be “updated” (I use that terminology loosely), when the main batch interface happens. This is normally around 12th of the month for the FPS figures, and then on 22nd of the month when the FPS less EPS amounts (if an EPS is used to reclaim any statutory payment) should match the total remittance paid to HMRC.
The guidance tells us we may get an “incorrect bill and duplicate payroll records” if we make a mistake. It’s still a mystery to me how employers and tax agents, who are almost all using commercial payroll software or HMRC’s Basic PAYE Tools, can create duplicate payroll records and incorrect bills.
The clue is in the next sentence in the GOV.UK guidance: “Both are usually corrected automatically - contact HMRC if your PAYE bill is still wrong by the 12th of the next month”.
“Corrected automatically”, i.e. without us intervening. That implies it is the central systems which are causing problems with both duplicate records within the national insurance and PAYE service (NPS), and incorrect payments within the Enterprise Tax Management Platform (ETMP).
The next three years are going to see a revolution in the digital interaction between individuals, businesses and HMRC. Let’s hope at the end of that journey employers and agents are not still being blamed for data inaccuracies as they are after three years of RTI.
I understand there are some employers who are incorrectly reporting PAYE either deliberately or through ignorance, but in my experience, they must be very much the minority. Day-in day-out I meet dedicated professionals spending significant amounts of non-chargeable time helping HMRC untangle their own data issues in order to reassure clients that all is well with their PAYE data.
Have you been affected by PAYE data you have submitted being mangled by the HMRC machine? Please let us know how you resolved the problem, by posting below.