“Delay extending RTI”, says HMRC user group adviser

EXTENDING real-time PAYE reporting to take in the UK’s largest companies should be delayed in order to avoid complications, according to a member of the scheme’s customer user group.

Kate Upcraft, payroll adviser at ISIS Support Services, harbours concerns the system might not cope when the country’s 16,000 biggest private companies make the switch, the Telegraph reports.

Real-time reporting sees PAYE reported on or before the date payment is made, while changes will be reported as and when they occur, rather than at the end of the financial year.

Although the system commenced in April, following criticism from stakeholders and institutes, allowances were made for businesses with fewer than 50 employees, allowing them to continue reporting their payrolls monthly until 5 October while they prepare, free of the threat of penalties.

That deadline has been pushed back until April next year, meaning “businesses will not be required to change their approach halfway through the tax year”, HM Revenue & Customs said.

As with the current relaxation, businesses are still required to report through the new system, but are able to do so once a month, rather than each time they pay their employees.

The changes form a key part of the government’s welfare reforms, providing the data needed to administer its new universal credit system.

Upcraft said she is amazed the Treasury has allowed HMRC to press ahead with plans to extend the scheme in the autumn while issues remain and that HMRC is 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 said the user group had raised concerns about a wide range of issues over an 18-month period in meetings with HMRC but many of these had been ignored.

The National Audit Office drew attention to a number of issues in a recent report, but HMRC has since reported the process is working well and said its evidence shows the administrative burden for employers is decreasing as a result.

An HMRC spokesperson said: “Real time filing of PAYE information will bring PAYE into the 21st 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 joing 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. But we are not complacent and are taking any reported issues seriously. We are working with employers and representative bodies so we can fully understand these issues, resolve them and amend our guidance.

“Having listened to stakeholders, we recently announced that ministers had decided to extend the temporary easement for small employers, originally announced in March 2013, from 5 October 2013 to 5 April 2014.”