Tuesday 30 April 2013

RTI - The Oncoming Surge

As the month end approaches so does the real crunch/test for RTI, as the majority of employers attempt to use RTI for the first time.

My thanks to a loyal reader for pointing me to two articles in AccountingWEB about RTI.

Regarding the oncoming surge, AccountingWEB quote Credec director Alexander Meynell:
HMRC reported that it had handled 70,000 submissions in week one of the new tax year: that’s 3.5% of the total. The end of the month is the real acid test.”
In the meantime, AccountingWEB also reports that 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 HMRC state:
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.”
What does this mean?

Rebecca Benneyworth (Deputy Chair of the ICAEW tax Faculty) is of the view that HMRC may be having IT problems, exacerbated by a surge in requests from single director companies to switch to the annual scheme option.

As per one payroll software developer:
"We’ve heard that HMRC can’t cope with the volume of requests and has closed the helpline number down while they decide what to do."
So then how are people getting along with RTI, both within and without of HMRC?

Tax does have to be taxing.

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  1. This comes down to the usual deliberate ignorance from government that regulatory burdens have behavioural impacts, especially on businesses where additional costs are involved.

    Something like 98%++ of businesses in the UK are micro-businesses, for whom cost management within the current recessionary environment is essential to their survival.

    The government has introduced a new regulatory burden as a one-size-fits-all solution, which is fundamentally biased towards the needs of larger businesses who have automated payrolls in place, paying little-to-no heed of the way the vast majority of businesses in the UK operate, from pubs, to nannies, to cleaners.

    It was obvious that most micro-businesses would roll the problem back to their accountants and in turn, accountants recommend solutions which save time, cost & labour for themselves and their clients. This has resulted in PAYE schemes being closed or moving to annual periods.

    Only HMRC could be so stubborn and stupid as to ignore the obvious unintended consequences of RTI as they have from the outset going back to 2010 when RTI was proposed. This latest problem is just another example of their wilful ignorance.

    There are none so blind as those that will not see...

  2. Haven't "The Muppets" just taken someone onto the cast listing from the energy sector conglomerate found out for not paying tax in the UK where they "generate" their income from, Empower or something?
    Nuclear power is about as safe as a Japanese nuclear plant built on the coast in a Tsunmami area. Even the French company "chosen" to build the next plant ot three in the UK appears to be having second thoughts.
    HMRC has one of these glowing characters in the revolving door factory. So next time someone tells you (N)uclear Power is safe, worry about that.

  3. We are doomed Mainwaring I tell ye, doomed!

    There's Klingons on the starboard bow...

    Revenue & Customs, bit like the pelican in that they can both stick their bills up their arse! The differnece being the pelican doesn't speak out of it's!

  4. With a few exceptions, hmrc knew months ago where it would go wrong and have prepared actions and excuses to fit.
    Plan B all along was what it has always been for this useless organisation, do nothing and ignore things in the hope that problems just go away. All the whiteboards in La La Land are of no use know, Pacesetter/Lean will not save them and for all the good that common purpose is in these circumstances, fill it with the bills that 30/4 21:33 referred to.
    At least with the real Muppet Show you could change channels if it was bad.