HMRC should delay extending RTI to UK's largest firms, says adviser

Plans by HM Revenue and Customs (HMRC) to extend real-time PAYE reporting to take in the country’s largest companies should be delayed in order to avoid complications with the system, according to a member of the scheme’s customer user group.
 
Kate Upcraft, payroll adviser at ISIS Support Services, is concerned the system is not yet ready to cope with the UK’s 16,000 largest private companies making the switch to Real Time Information (RTI) reporting.
 
The premise behind RTI is that PAYE is reported on or before the date payments are made to employees, with changes reported as and when they occur, as opposed to at the end of the financial year.
 
The system commenced back in April, amid criticism from stakeholders and institutes, which resulted in allowances being made for businesses with fewer than 50 employees to continue to report payrolls monthly until October 5.
 
As a focal point of the Government’s welfare reforms, RTI reporting provides the data needed to administer its new universal credit system.
 
However, Upcraft is concerned the Treasury has agreed to HMRC pressing on with plans to extend the scheme in the autumn despite issues such as HMRC overstating tax receipts "on a massive scale as they are corrupting employer data".
 
"Two of my clients have been asked for sums around £1m for one tax month that is not due," she said.
 
Upcraft added that other members of the RTI customer user group had voiced concerns regarding a number of issues over an 18-month period in meetings with HMRC, but most of these had been ignored.
 
Despite this, HMRC has recently reported the process is working well and said its evidence suggests the administrative burden for employers is diminishing as a result.
 
An HMRC spokesperson said: "Real time filing of PAYE information will bring PAYE into the 21^st Century, and will improve the operation of PAYE for employers, HMRC and employees. Over 1.57 million PAYE schemes have already started to report PAYE information in real time.

"This is a huge change. Few issues have been identified so far and those have been resolved quickly.
 
"Employers are joining RTI according to their normal payroll cycle, and for some, it will take a little while to get into the routine of reporting RTI. In the first year, we want to support them in meeting their new obligations."

Last updated: 26th July 2013