HMRC’s habit of putting new PAYE schemes into the RTI pilot scheme without telling them is building up another rash of filing problems and penalty concerns for the end of May.
“We’re encountering many situations where people didn’t know they are on RTI. It appeasrs that thousands of schemes didn’t realise they were on RTI,” warned Tom McClelland of payroll software developer 12Pay, who has been monitoring the situation on AccountingWEB and his company’s helpline.
McClelland thinks that from around February all new schemes were put into RTI, whether they wanted to or not. But AccountingWEB member Jean Reeve reported that a scheme set up back in October had its P35 rejected because HMRC had put it into RTI. Multiple posts on the site, including from members David2371, SarahP, E Lewis and cathyne.
According to McClelland, many of the companies only discover their plight when they try to file a P35 or P14 for 2012-13 and get it rejected because they’re on the pilot.
“Now that the 19th of April has passed, under RTI they can only file an earlier year update (EYU), a file format that HMRC itself can’t handle yet, nor several leading payroll software suppliers,” he noted.
The problems software developers are experiencing with the EYU is because the form requires people to file the difference between what has already been filed and the required annual totals. “But that is crazy, because you don't know what has already been filed and there is no way of finding that out for sure,” McClelland complained.
“We’re worried large numbers of people will discover they have been on the RTI pilot all along. Quite a lot will discover on 19 May that their RTI filing is late, and they’re already a month into potential penalties.”
In her RTI Q&A webinar with Intuit, Rebecca Benneyworth explained that schemes set up during the 2012-12 tax year could choose to go into RTI or not. “At some point that choice disappeared, and it’s obvious [that HMRC] was not clear enough.”
There has been a scare on AccountingWEB that companies could be hit with penalties, but HMRC tried to allay these concerns by explaining how companies caught in the situation can comply.
“Penalties are not changing – HMRC is treating pilot employers in the same way as we will treat non-pilot employers,” the department said.
Benneyworth amplified this message. If you have missed the 19 April deadline for filing a full payment submission with the “final payment of the year” indicator set, you can file the EYU under RTI, or ring the new HMRC employer helpline (0300 200 3211) and ask them to reset the scheme’s RTI commencement date to 6 April 2013.
“That will allow to file P35 and then go into RTI,” she said.
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John Stokdyk sadly passed away in June 2023. He had been with the site since 1999, rising from news editor to editor in chief, global editor and head of insight. As a roving editor, he investigated the profession's use of technology around the world. He devoted his spare time to technology history and an oddball collection of stringed...