In the third part of this series Kate Upcraft looks at the upgraded Business Tax Accounts, highlights timing and accuracy issues concerning RTI data, and reports on a fortunate turn of events with student loans.
Business Tax Accounts
Can we please encourage our clients to access their Business Tax Accounts (BTA) at least once a month? Even if the employer has outsourced their payroll, they need to understand whether the data and payments that have been sent on their behalf have been processed correctly by HMRC. This is important, given the frequency of data and payments which are apparently corrupted on receipt by HMRC.
The upgrade of the BTA, according to Employer Bulletin issue 68, is “to improve the accuracy and design of employer PAYE liabilities and payments information”.
This is what clients should now see:
This shows the current year tax months. They are now arranged with the current month at the top and the earlier months in reverse order. The data is displayed by the 10th of the month after month end, still not in real time but two days earlier than previously.
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I have asked if the current month can show a message to the effect that the data will be displayed on 10th so clients aren’t worried that a blank line means you have forgotten to send the FPS.
PAYE statement page
Clicking on the hyperlink under the tax month takes you to ‘PAYE statement’ page. This is still a work in progress but incremental changes are being made each day. The FPS data does now include the apprenticeship levy, but also liabilities that don’t apply to a scheme such as CIS are shown with a zero – not necessary - and totals aren’t lined up.
The HMRC team is working on this as we speak. EPS recoveries are now shown on 10th of the following month, if sent by tax month end, or within one day if sent from 6th to 19th
Payments received page
This page has been reinstated. It was initially removed as part of the upgrade until I pointed out that it was a vital part of the jigsaw to see if the payments received match the liabilities ie the payments have been allocated to the correct month and year (or even the correct PAYE scheme).
Payments still don’t flow through to the BTA from HMRC's payment database for six days, which means if a client pays on deadline day (22nd) it will be 28th of the month after the month concerned before all the payment and liability data should be displayed.
As part of the upgrade, HMRC staff should now be able to see exactly the same figures as your client, as a batch processing error has been fixed that caused their internal view of data to be different.
I have met with the BTA team at HMRC again this week, and they are planning to reinstate the reallocations information, so it’s clear if this is the cause of data mismatches. Given the continued prevalence of duplicate records and incorrect payment allocation, it’s vital to get clients to check their BTA and then raise a disputed charge with the Employer Helpline if the FPS/EPS data is wrong and raise the issue with Debt Management if the payment data is incorrect.
RTI data - timing issues
Despite HMRC’s assertion that the BTA upgrade will improve data accuracy, there can be no improvement in the accuracy of data displayed until work is done on the underlying causes of data inaccuracy.
As always, employers and tax agents are urged to get data in on time, but what is “on time”? Yet again the Employer Bulletin says the FPS deadline is “on, or before, the date of payment” which is incorrect.
The FPS deadline falls on, or before, the contractual date of payment. If the contractual payment date for an employee falls at a weekend or bank holiday, then the date of payment in the FPS must remain anchored to that contractual date if you pay the employee on the first banking day ahead of the weekend or bank holiday. This ensures that there is the correct gap between reported earnings for Universal Credit (UC) purposes and that payment is made in the correct tax year where an employee is due to be paid on 6th April and that happens to be a bank holiday as it was at Easter 2015. See the February 2016 Bulletin for a correct explanation of the deadline date.
In a recent answer to a parliamentary question Stephen Timms MP was told by HMRC that of the 590m records they receive a year through RTI, 5.7% are late. I assume that this figure is simply arrived at by HMRC carrying out a binary comparison of the date in the FPS and the date of receipt.
RTI data – accuracy
Despite being told we must submit up to date and accurate employee information there is no mandatory requirement to submit a NINO for each worker, as some employees will never be subject to UK national insurance.
If all the fields listed in the Employer Bulletin are causing HMRC matching issues, then isn’t it time that files are rejected if mandatory data isn’t present? The FPS / EPS may be late if that happens, but it must be the case that accepting incomplete data already causes significant delays in matching for HMRC and DWP, which impact the taxpayer.
The work on a unique ID also ought to be resurrected. This work has begun several times over the last decade and then faded away. NI numbers will never be unique enough to one period of employment with an employer, and with the vital need to match data to Personal Tax Accounts and onwards to DWP, addressing this issue is as important as ever.
Finally, Employer Bulletin issue 68 confirms that the Student Loan plan 2 threshold is to rise to £25,000 from April 2018. HMRC were very fortunate here. The Welsh Assembly only confirmed that they would agree to raise the threshold for Welsh students on the day that Bulletin was published.
It is not in the Westminster Parliament’s gift to unilaterally decide on Plan 2 thresholds. That Parliament can only make decisions about English student loan repayers. It was a huge relief that the Welsh Assembly didn’t decide that they would retain a £21,000 threshold so leading to a plan 2A and a brand-new starter checklist too.
About Kate Upcraft
Kate is a technical writer, editor and lecturer on all aspects of employing people - primarily payroll and HR matters.