Loyal readers will be aware that Phil Pavitt (CIO of HMRC) has been somewhat blowing his own/HMRC's trumpet recently about how HMRC has reduced its IT spend.
Some of you (for shame!) have been a tad cynical about the veracity of his boasts. Well it seems that, whilst costs to HMRC may (or may not) have been reduced, the costs to HMRC's "customers" of implementing HMRC's flagship (akin to the Mary Rose) IT development Real Time Information (RTI) have gone up.
HMRC has revised its figures for the financial burden that Real Time Information (RTI) will have on employers. Payroll World reports that there are a number of costs being imposed on employers from having to use the new system:
- There will be a one-off transitional compliance cost (at least £120M) for firms as they begin to submit RTI.
- Offsetting HMRC's estimates of employers' savings (£330M per annum from 2014) from using the new system, will be the costs of the new administrative burdens being placed on employers by HMRC (ie realtime data collection/submissions each time employees are paid). HMRC believe that this will cost £30M per annum.
- Unknown costs of software development (needed to use the new system) which will be passed on to the employers.
This is know as spreading the load, so that HMRC's costs are kept down.
Needless to say, all of the above is based on the assumption that RTI actually works and comes in on time and on budget.
Tax does have to be taxing.
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some of what Payroll World quotes from HMRC (so I can not verify its accuracy) –
ReplyDelete"those paid below the National Insurance contributions Lower Earnings Limit. HMRC does not hold the data needed to estimate this cost."
Well that is helpful then (as always with HMRC), we will just ignore the fact that
a) HMRC holds no info
b) the cost of obtaining and maintaining that info
"but expects the final impact to be a significant net saving.”
A net saving to whom?
"There is also a £85m cost for training and familiarising staff with the new processes, on average around £50 per PAYE scheme."
get real, with a staff of over 1200 and 300 contract staff do HMRC really think it will cost £50 per PAYE scheme to sort out? That sounds like another HMRC realistic estimate then.
"additional costs for any updates to payroll software and processes that the Revenue says have not yet been estimated."
This just gets better and better. It's Jakanory (showing my age)
I can see where this is going, especially when employes cock up their time sheets and over and under-record their timesheets and hours worked per week or when adjustments have to be made... overtime and hours lost ...
and more than one source of income for employees (perhaps all below Lower Earnings Limit)... sort that out for £50.
Bloodbath methinks, still keeps Ken blog going for the next ten years.
some of what Payroll World quotes from HMRC (so I can not verify its accuracy) –
ReplyDelete"those paid below the National Insurance contributions Lower Earnings Limit. HMRC does not hold the data needed to estimate this cost."
Well that is helpful then (as always with HMRC), we will just ignore the fact that
a) HMRC holds no info
b) the cost of obtaining and maintaining that info
"but expects the final impact to be a significant net saving.”
A net saving to whom?
"There is also a £85m cost for training and familiarising staff with the new processes, on average around £50 per PAYE scheme."
get real, with a staff of over 1200 and 300 contract staff do HMRC really think it will cost £50 per PAYE scheme to sort out? That sounds like another HMRC realistic estimate then.
"additional costs for any updates to payroll software and processes that the Revenue says have not yet been estimated."
This just gets better and better. It's Jakanory (showing my age)
I can see where this is going, especially when employes cock up their time sheets and over and under-record their timesheets and hours worked per week or when adjustments have to be made... overtime and hours lost ...
and more than one source of income for employees (all possible below Lower Earnings Limit). Sort that out for £50!
Bloodbath methinks, still keeps Ken blog going for the next ten years.
Whoops what happened there then?
DeleteOh its computing – and the numpties that use them (yes including me!).
Sort that out for £50! (accidental duplication of info etcetera etcetera)
(it was actually a genuine mistake, it didn't appear to accept that stupid code verification)... but of course non of that or hacking and phishing wont happen with RTI !
my ....
THOUSANDS OF PENALTIES ARE SENT OUT EVERY YEAR FOR LATE OR NON FILING OF P35s. HMRC ARE NOW "FORCING" EMPLOYERS TO DO THIS 12 TIMES A YEAR. IF YOU THINK THE TELEPHONE LINES ARE BUSY NOW YOU A'INT SEEN NOTHING YET.IF ANYONE THINKS THE HIERACHY GIVE A TOSS ABOUT THIS INEVITABILITY---- THEY DONT.
ReplyDeleteActually I believe its the Government's flagship "Universal Credits" that's forcing this through. RTI is needed to support the introduction and a Department with a proven track record of IT failure is the one unfortunate enough to have it dumped on them. Though DWP's record ain't that hot either!
DeleteThough I have no doubt that someone will tell me I'm incorrect.
Looks like you are not far out; (but as you say until someone states otherwise)
Deletesee third paragrpah if don't read all of this
According to Payroll World –
Questions have been raised over why certain data items will need to be collected for Real-Time Information (RTI) that are not related to individuals’ taxable income.
HM Revenue & Customs (HMRC) wants payroll departments to collect hours worked by employees for RTI and log them in three categories: up to 16 hours (15.99 and less); 16 to 29.99 hours; 30 hours and above; and other.
But concerns have been raised that the collection of such data is forcing payroll departments to take on extra work, so the Department for Work and Pensions (DWP) can assess benefit claims under the Universal Credit system.
Matt Boyle of the Research 4 PAYE group said: “HMRC is concerned about the correct amount of income tax being paid on an individual’s taxable income. Receiving any hours-related benefits is a personal responsibility, and not one that big brother needs to be involved in.
“What next? Should employers report individuals who don’t use a wheelchair at work, just in case they are claiming disability benefit?”
Karen Thompson, associate director of policy, research and strategic vision at the Chartered Institute of Payroll Professionals, says that one of the main issues is whether actual hours worked, or contractual hours, will be recorded.
“If actual, and it is a positive payroll, there is no issue as payroll needs hours recorded for pay. But if it is a negative payroll, with a stored salary that does not change without intervention, the hours stored are normally only used for pro rata calculations,” she said.
“The hours worked are related to taxable income as this reflects pay, however HMRC knowing the actual hours does not, but will be used to determine tax credit payments and Universal Credit payments.”
A spokesman for HMRC said: “We will not be asking for specific hours worked, but will be asking for employers to put their employees into bands of hours worked. This will enable us to improve the accuracy of tax credit awards.”
So at least employers ony have to put employees into BANDS of hours worked – which is of course something they do automatically now – NOT.
Here's a section from the guidance – looks like a doddle! NOT.
ReplyDelete(interesting an automatic report email is acknowledged as acceptance of receipt, which of course could be sent by anyone from anywhere and HMRC state is not 'reliable'!).. so HMRC is relying on a process and procedure which it states is UNRELIABLE! (you couldn't make it up).
and HMRC, rather than set up a system where email 'replies' to HMRC auto generated emails to actually go somewhere and to be dealt with by a person will be our fault and no response will be forthcoming from HMRC – sounds fair enough – NOT! (in other words your repsonsibility to pursue the problem through the HMRC helpdesk!)
AND as someone has commented if the telephone lines and helpdesk are already in meltdown, this will be real fun and games!
summary from
http://www.hmrc.gov.uk/softwaredevelopers/rti/mig-rti-fps.pdf
Email systems, whilst usually reliable, are not a guaranteed form of communication.
If you do not receive this email, please contact the Online Services Helpdesk giving details of your file contents, e.g. a PAYE Scheme within the file.
The Helpdesk will then investigate and respond to your query.
Submissions which are shown as "Rejected" need to be corrected and re-submitted.
you may need to contact the Online Services Helpdesk for further explanation
Please note that the email containing the Acknowledgement Report is automatically generated.
If you just "reply" to the email with a query, you will not receive a response.
all this in the cost to employers of only £50?
Deletepursuing a query, however caused will cost more than £50!