HMRC Is Shite

HMRC Is Shite
Dedicated to the taxpayers of Britain, and the employees of Her Majesty's Revenue and Customs (HMRC), who have to endure the monumental shambles that is HMRC.

Tuesday, 9 July 2013

300,000 RTI No Show


Payroll World reports that 300,000 companies have failed to report Real Time Information (RTI) to HMRC, ie switch to RTI by the early June deadline.

As a result they have been sent letters by HMRC informing them of their legal requirement to have filed PAYE in real time from April 2013.
An HMRC spokesman said:
We know that the vast majority of these 300,000 schemes do not have any employees. It’s really important that employers tell us if they haven’t paid anyone in the tax month. 

This is easy to do. All the information they need is on our website at www.hmrc.gov.uk/actnow. If a scheme is no longer needed employers should contact us so we can close it on our records.
Tax does have to be taxing.

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9 comments:

  1. WTF?!
    Have you upset the NSA?

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  2. This quite well illustrates the nit-picking idiocy of RTI, that it ignores the bureaucratic burdens it places on small businesses and then tries to flog them and eventually fine them for non-compliance.

    I know of several business who have had to change their payrolls from perfectly legal daily and weekly payments to monthly salaries simply because they could not have coped with the bureaucracy of doing payroll more frequently under RTI.

    The fact is that the de minimis level for RTI is simply too low and it would have been better to exclude micro-businesses on the basis of turnover < VAT registration level or less than 5-employees.

    If they had done that, I doubt their would have been more than a handful of companies unable to meet the deadline.

    I suspect the taxman will lose out in PAYE and NI as the cost of compliance becomes another disincentive to registration in the first place. More on-the-black businesses paying more off-the-books employees.

    Just what our crippled economy needs.

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    Replies
    1. It's a fair point, but I think your solution, exempting small businesses, is the wrong one.

      The whole point of RTI is that it prevents people getting into a large under/over-payment position (of tax and/or benefits), which under the previous PAYE system led to the need for a big, expensive and often traumatic reconciliation at the end of each year.

      The people who are most likely to be in that position are those who have a number of (possibly casual) jobs over the year ... and these jobs are very often with small businesses.

      I agree, however, with the problem you've identified. My view is that it should be not-quite-real-time information in certain circumstances. For example, the daily or weekly payers you're talking about could be allowed to file a monthly return rather than having to do it at the exact time of payment. It's hard to see what the advantages are of mandating immediate provision of information in these circumstances.

      Stew G

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    2. @Stew G:

      Both the institutes and working together groups said this from the moment RTI was mooted, but both HMRC and (by proxy) DWP ignored them.

      Your view that some magic is going to happen to stop the annual PAYE reconciliation farce is at best optimistic, and at worst naive.

      Although the RTI frontend is in place, the next 12-18 months will be concentrated on getting the DWP end to work to support Universal Credit. I'll be stunned if we see any substantive RTI-based improvements before 2016.

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    3. "Both the institutes and working together groups said this from the moment RTI was mooted, but both HMRC and (by proxy) DWP ignored them."

      Fair enough, although it's not clear whether "this" refers to your de minimis suggestion or my not-quite-real-time suggestion.

      "Your view that some magic is going to happen to stop the annual PAYE reconciliation farce is at best optimistic, and at worst naive."

      Why? My understanding is that a stated longer-term aim of the introduction of RTI is that tax codes will be updated more regularly throughout the year. While some reconciliation will of course still be required, by definition it will be significantly more regularly than once a year, thereby making the over/under-payment positions smaller. No magic - just doing the same thing more often, really.

      They're not introducing that change yet (as we're seeing, one change at a time is more than enough!) but it is one of the things that RTI is supposed to enable. I'm largely unsighted on the details of RTI, so I accept that I could well be misunderstanding it and/or you may know a reason I don't about why it won't meet that stated aim. If you feel I'm being naive, therefore, perhaps you could expand a little.

      "Although the RTI frontend is in place, the next 12-18 months will be concentrated on getting the DWP end to work to support Universal Credit. I'll be stunned if we see any substantive RTI-based improvements before 2016."

      No doubt you're right. It's a long game. The fundamentals of the system haven't changed since the 40s. What's your rush?

      Stew G

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    4. ...actually, I see from this report that they apparently are introducing a not-quite-real-time information exemption.

      SG

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  3. We've been avidly following the RTI roll-out, no great surprise that it's failed to hit 100% effective there will always be a margin of error involved, but I certainly don't think its a detrimental point of HMRC per se.

    Communication is a two way street and HMRC has gone to great lengths to communicate from their sire of things, business owners also need to step up to the plate and fulfil their obligations.

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    Replies
    1. "business owners also need to step up to the plate and fulfil their obligations."

      Don't piss on my back and tell me that it's raining...

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    2. I think you might have the wrong idiom there, John. The "don't piss..." one applies where someone harms you and then blames it on external factors. Surely this calls for one for when someone harms you and then blames you for it. Unfortunately I can't think of the right one...

      Regards,

      Bernard Woolley :)

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