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Monday, 19 March 2012
Spreading The Load
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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