As the volume of RTI traffic surged at the end of April, AccountingWEB was swamped with rumours, warnings and panics about the new real time information (RTI) regime for PAYE. This digest provides a quick overview of the latest developments.
30 April - HMRC moves to calm RTI pilot penalty fears
HMRC provided clarification over RTI pilot penalties and late year-end returns after a number of AccountingWEB members set alarm bells ringing last week.
After discovering that under RTI the deadline for submitting year-end returns was 19 April rather than 19 May under the old system, AccountingWEB member Kazmc assumed that as there would be no penalties for the first year of RTI, FPSs could be submitted late. But when they tried to subit month 12 FPSs and the end of year declarations, they had missed the 19 April deadline.
Sage advised Kazmc that the only way around this was to give HMRC a list of all the payrolls affected. Then when the EYU [Earlier Year Update] facility is available, the employer will have 14 days to submit everything via the government gateway. If this does not happen, late filing penalties will apply.
Other AccountingWEB members reported similar problems - particularly if you're depending on HMRC's EYU tool, which won't be ready in time. “The deadline for informing them that you'll be late because of the delay with the tools is 19 May though so you could wait until it's a little quieter to contact them,” Onicholson suggested.
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30 April - How to escape the involuntary RTI pilot trap
New PAYE schemes put into the RTI pilot scheme without being told face extra filing problems in May.
“We’re encountering many situations where people didn’t know they are on RTI,” warned Tom McClelland of payroll software developer 12Pay. AccountingWEB member Jean Reeve reported that a scheme set up back in October had its P35 rejected, and several other members had the same experience, including David2371, SarahP, E Lewis and cathyne.
“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.
“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.”
HMRC tried to allay these concerns by explaining how companies caught in the situation can comply (see item above). 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.
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29 April - HMRC puts RTI annual scheme requests on hold
HMRC has temporarily stopped employers and their payroll agents from switching their pay cycles to lessen the administrative burden of RTI. In new guidance published on its website today, the tax department explained, “There has been a recent increase in the number of employers and agents requesting the registration of PAYE schemes as annual.
“Please note that, at the moment, HM Revenue & Customs (HMRC) are unable process requests from employers to: move to paying annually and register as an annual scheme; change their payment frequency. HMRC are working to rectify this position and will publish a further 'What's New' message to announce when this is ready.”
Annual schemes are a useful option for one-man limited companies, with reports that SJD, a leading adviser to contractors, submitted thousands of requests to switch its clients. More details here.
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29 April - Many employers still don't know what to do
HMRC needs to do more to educate small employers on the ins and outs of RTI, according to CIOT technical director Tina Riches
Recent Any Answers queries on AccountingWEB and feedback from payroll software developers indicate that as real time information (RTI) reaches the end of its first month of official use, non-compliance is widespread. Many small employers will continue paying students and casual workers cash-in-hand without reporting it, accountants warned.
Riches called on HMRC to do more to help small firms understand RTI rules. “We have been in contact with a number of small businesses not connected to an agent. While awareness is increasing rapidly, the problem is some people don’t know what to do,” she said. “Under RTI, if someone has a PAYE scheme set up for employees who pay NI and PAYE, they must file RTI submissions for all employees, including those who don’t need to pay that tax. I don’t think this message is getting through to smaller firms.”
While penalties for late filing will not be introduced until April 2014, as announced in Finance Bill 2013, penalties for filing accuracy will come into force from July.
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26 April - Month-end crunch looms for RTI
Alexander Meynell, commercial director for ICAEW-endorsed Bacs services provider CreDec, told AccountingWEB that the final few days of the month would be "real acid test" for the new PAYE filing regime.
“HMRC reported that it had handled 70,000 submissions in week one of the new tax year. That’s 3.5% of the total," he said. “Were RTI not to perform and government gateway has a collective heart attack from the 30th when it is hit by this surge of reporting, in due course HMRC will send out letters. The recipients will call their accountants and payroll providers and want to know what happened,” he warned. "It puts the profession in a very, very uncomfortable position.”
Rebecca Benneyworth and the CIPP's Helen Hargreaves were less concerned about the meltdown threat.
- Real Time Information checklist
- RTI: What you need to know
- CIPP guide to RTI: Your first submission
- HMRC RTI homepage
- HMRC FAQs
- HMRC data quality homepage
- RTI implementation gripes - Intuit RTI Help Centre guide by Rebecca Benneyworth
- Sage RTI surgery with the CIPP's Helen Hargreaves, 29 April-3 May
- More RTI guides and Any Answers queries
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AccountingWEB’s Editor at large has 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 continues to investigate the profession's use of technology around the world. He devotes his spare time to technology history and an oddball collection of stringed instruments...