Penalties delayed after hundreds get RTI non-filing notices
STOP PRESS (12 Feb): HMRC has announced that it will delay the introduction of automatic penalities for late filing and late payment following a series of teething troubles with the online filing system. More details are available here.
Today's breaking news will be a relief to accountants who have received a rash of incorrect PAYE “no-filing” notices and follows a call from the ICAEW and other professional bodies and software developers for a delay to the imposition of automatic penalties under the real time information (RTI) regime.
On Friday morning (7 February), AccountingWEB member 0098087 reported getting a load of RTI non-filing notices for the period ending 5 Feburary, even though their payment run was on the 7th and their RTI returns were submitted on the same day.
A quick survey of the 49 comments that followed established that around 80 similar notices have been incorrectly issued to these AccountingWEB members.
They are not alone.
In recent weeks, AccountingWEB’s Any Answers page has seen RTI-related queries, complaints and rants about:
- Dubious specified charge estimates raised by HMRC for periods when no payroll payments were made
- Misleading guidance on when to file a nil EPS or an FPS when no payment is due
- Missing and inaccurate data in employers’ tax dashboards.
- Harassment of clients by HMRC debt management agents acting on this inaccurate information
The confusion and difficulties pacifying clients who expect their accountants to get their payroll right is bad enough. Comment after comment in the AccountingWEB thread highlighted the time taken to resolve the non-filing notice problems with HMRC - partly due to the “barrage” of phone calls it has received about the issue, according to Kazmc.
But the situation will get even worse if the RTI system continues to send out inaccurate non-filing notices after April, when they will be accompanied by automatic penalties. “We could be looking at appealing £2,000 worth of penalties from notices received just today,” Kazmc commented.
The ICAEW Tax Faculty, too, has been fielding similar complaints from its members. In its response to the government’s consultation on secondary legislation, it called for a delay in the 6 April start date for RTI automatic penalties.
“A year after go live, PAYE real time information (RTI) still has too many teething troubles,” noted the faculty. Its submission also called for adequate funding to made available to “sort out RTI as soon as possible”.
The ICAEW’s call was echoed by AccountingWEB members. “A system that sends out erroneous reports is clearly not fit for the purpose of raising penalties,” commented stepurhan. “There is no way HMRC should be able to levy penalties until this is sorted.”
Moneysoft’s help desk has been busy this week. Richard Carey came on to AccountingWEB to inform members of correspondence the payroll developer received from HMRC that stated, “For those who have filed their ‘no payment EPS’ they can be assured that the notification can be ignored...” He added that he was hoping for further clarification shortly on HMRC’s website.
The growing volume of inaccurate messages bears uncomfortable parallels to the 2008-10 NPS implementation disaster in the way HMRC’s system is continuing to create a new employment on the employer’s record every time it encounters a discrepancy. For employers, this has meant duplicated PAYE charges in recent months, but the worry is that thousands and even millions of duff employment records could be stacking up behind the scenes at HMRC.
Turning his attention to the systems issues behind the inaccurate tax dashboard figures, AccountingWEB member DMGbus noted that HMRC’s Employer’s Office often has correct data from FPS reports , but the Collector of Taxes does not.
“A plausible explanation is that there is a design flaw at HMRC end with the suspected (but HMRC would never admit this) whereby one department (Employers Office) receives the data and has to by manual intervention ‘map’ or copy and paste the data to another department (Collector of Taxes). One would have thought that this would have been an automated process, but the existence of differing data in two departments suggest that some scope for human error exists in transferring data, or alternatively HMRC's IT partners have not fulfilled their contractual obligation to provide a system that works.”
Weecalum added: “HMRC need to admit that they have made an error and not try to say we (employers) have submitted incorrect details. The refusal to admit that there are problems with RTI is doing nothing to help taxpayers’ trust and confidence in HMRC.”
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