Have you hit the RTI information gap?
Accountants and payroll service providers are beginning to report minor misalignments with PAYE data submitted via RTI and cannot access the live figures to verify that they have reconciled clients’ PAYE records successfully.
Bacs service provider CreDec reported on the issue in a statement on its AccountingWEB supplier page and has liaised with ICAEW Tax Faculty chair (and AccountingWEB roving editor) Rebecca Benneyworth about the problem.
Under the security arragements on the government web gateway, once an agent has filed a client’s full payment submission (FPS) or employment payment summary (EPS) and received acknowledgement back of a successful filing, they are prevented from doing anything else; their gateway ID does not allow access to the client PAYE account for which they submitted the return.
One way around this information impasse is for the agent to log in to the employer’s tax dashboard to view the figures, but CreDec warned, “The majority of employer clients do not have access to the full picture on PAYE RTI, because bluntly, in their view, that’s what they pay their accountants for.”
Even where both sides have access to their respective data - the RTI returns submitted and the PAYE account balance of liabilities (including payments) - neither side can easily share this data without undertaking their own reconciliation exercise, the company warned.
“This is the PAYE RTI information gap and it’s where the profession’s attention is now turning after three months of real time reporting.”
If any issues do arise later with PAYE reporting accountants will have no advance warning until their clients tell them HMRC has contacted them about a discrepancy. “The challenge and cost of having to identify any errors in HMRC’s reconciliation of return data that was submitted in real time, potentially long after the submission, is likely to be significant,” according to CreDec.
Benneyworth responded: “They’ve got a good point. I’m starting to get feedback from agents and employers about apparent underpayments of PAYE arising because of how RTI is processed. Not everyone has got month-end cross-over right and are getting slight misalignments
“My concern for agents is they’ve priced up their service not anticipating this to be a problem. Obviously they had to check this when they were doing P35s - but to reconcile the figures on a monthly basis is not something they’ve costed in. I anticpated it was going to emerge as a problem - and funnily I wasn’t wrong.
CreDec’s suggestion that agents go into the client’s business tax dashboard to see the final figures would work, but Benneyworth thought it was not ideal to log in with the client’s ID.
The solution to the information gap will eventually come with the agent dashboard promised under HMRC’s agent strategy, which will show clients’ full tax liabilities. But it may take a couple of years before that is rolled out, Benneyworth warned.
Until then, she suggested waiting to see if the reconciliation issue settles down, but with an awareness that it could grow into an even bigger issue for PAYE service providers.
“It’s a little early to see if it’ll be a nightmare for the full year, but potentially it could be a big headache,” she said.
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