Securing Compliance With Real Time Information – Late Filing and Late Payment Penalties

A few days ago HMRC issued a consultation document entitled "Securing Compliance With Real Time Information – Late Filing and Late Payment Penalties". The deadline for submissions being 6 September 2012.

HMRC being known for its "customer focused" attitude is keen to point out that, despite the concept of RTI being "quick and simple", it is gung ho to impose new penalties for late submissions. Hence the consultation document is about penalties (rather then the smooth implementation of RTI):

"Supplying information to HMRC under RTI is designed to be quick and simple, as it will be integrated into employers’ payroll processes. 

HMRC wants to maximise compliance with RTI and this document seeks views on how we can achieve that. 

Late filing penalties will be a fallback where information is not supplied on time, and this document seeks views on how these penalties should be structured. It sets out two possible models that build on existing penalty models. 

Late payment penalties will also apply although under RTI the payment obligation for employers is not changing. 

Some refinements to the existing late payment penalty model are set out in this document and views are also sought on these."

The "good" news being that:

"The new late filing and late payment penalties for RTI will be issued automatically rather than manually." (para 2.12)

No possibility of error there then, given how well HMRC has done so far with wrt issuing automatic penalty notices!

Shhh don't mention the 12,000 erroneous penalty notices sent out in April.

As loyal readers know, RTI features on this site with the depressing regularity and inevitability of the return of an unloved season, eg in April I wrote:

"Today being the 100th anniversary of the Titanic sinking, it seems appropriate to highlight this well crafted comment made by a loyal reader yesterday about RTI (which topically makes an analogy of RTI hitting an iceberg):

"There are over 4 million employers in the UK. The RTI Pilot is running with just a handful. I gather even by October 2012 the number will have only been increased to a couple of thousand. This is still only about 0.05% of the total. The plans seem to suggest that over 99% of employers are going to be brought into the scheme from April-October 2013. This is a challenging timetable to put it mildly.

More worryingly the number of employee record being processed each year is going to balloon from about 25 million annual returns to in excess of 500 million weekly or monthly returns. This is going to put a great deal of pressure on HMRC already creaking IT systems. In particular the need for data to flow through the system on a relatively short cycle (ie weekly or monthly rather than annually) means that any failures in the application will lead to back logs of returns building up quite quickly. Once that happens the system may struggle ever to recover.

On the face of it RTI has potential disaster written all over it. However, this probably wont happen until after the pilot using a few carefully selected employers has been declared a success. Expect everyone involved to jump ship at that stage before it hits the iceberg and sinks with all hands."

Call me a cynic, but I do not believe that RTI has a hope in hell of coming in on schedule, on budget or on specification."

I have no reason, based on information available, to change my views on RTI ending up as being a clusterfuck of Titanic proportions. However, as ever, I welcome the views and opinions of others.

Tax does have to be taxing.

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