RTI: THE LAUNCH
As early filers make their inaugural PAYE submissions under HMRC’s new real-time information system, it is clear there are teething difficulties to be overcome
s Accounting and Business went to press, most UK employers running weekly payrolls had made their first PAYE submissions to HMRC under real-time information (RTI), following its official launch on 6 April. Early filers weren’t helped by the overlap with HMRC’s IT portal maintenance, conducted at the start of every tax year, which fell over during the launch weekend. General practitioner John Tiltman FCCA of Stourton Accountancy Services, which runs a payroll bureau, also experienced some filing problems on Monday 8 April. By Tuesday, however, in Tiltman’s experience, both Employer Alignment Submissions and Full Payment Submissions (FPSs) were going through more smoothly than he had anticipated. According to HMRC, between RTI’s start on 6 April and the morning of 9 April, 70,000 RTI submissions were processed. Payroll experts were not exactly counting their chickens, however, as employers running monthly payrolls still had to run their first FPSs. ‘So far the mechanics of submitting the data are going OK,’ says Helen Hargreaves, senior policy and research officer at the Chartered Institute of Payroll Professionals. ‘But I will be glad when we get through the first month.’ Many employers and advisers running weekly payrolls have needed considerable support. Helplines run by HMRC and software providers struggled to meet demand, with callers sitting in long queues. ‘For a change as fundamental as this, and with the vast majority of payrolls in the country now being mandated for RTI, you would
expect the helplines to be very busy,’ says Colin Ben-Nathan, employment tax specialist and spokesman for the Chartered Institute of Taxation (CIOT). Answering queries appears to have been challenging for helpline staff themselves. David Heaton, a partner at Baker Tilly, found some confusion
(see box). These could, perhaps, have been announced a little earlier. ‘HMRC didn’t give employers and their payroll providers a lot of time to take on board the detail – and there is a lot of detail,’ says Ben-Nathan. Another challenge for employers has been ensuring payroll data is
‘THE COST TO BUSINESS IS ENORMOUS. WE’VE HAD REPORTS OF PEOPLE TAKING A DAY JUST TO GET BASIC PAYROLLS ORGANISED FOR RTI’ among HMRC’s helpline personnel about certain technical issues, referring to an attempt to register a UK company whose directors are all based in India. ‘The Revenue is saying they have to come over to the UK and apply for a national insurance number, otherwise it can’t register the company,’ he says. ‘But they don’t need a national insurance number if they don’t do any work in the UK. And there is nothing in the legislation that stops a UK company from having all non-resident directors. The helpline staff need to be told that.’
Pragmatic approach On a positive note, most payroll experts believe HMRC has taken a pragmatic approach to the launch of RTI. There will be no penalties for late filing of FPSs in 2013/14. HMRC also appears to be applying a light touch in relation to applying penalties for inaccuracies in submissions. A number of relaxations were also announced in the run-up to RTI’s launch, such as for expatriate employees, situations involving share schemes and small employer reporting
accurate and complete. ‘Employers have had issues with getting people to understand that they need to give the necessary information,’ reports Rachel Andrews, FD of Andrews Computer Services and adviser to the Forum of Private Business on payroll issues. For example, some employees failed to provide their middle name, but were using a middle initial in their signature. Such RTI preparations cost. ‘Accountants are talking about doubling their payroll bureau charges,’ says Tiltman. ‘RTI shouldn’t be timeconsuming when it’s up and running, but accountants have to get something back [for time incurred up front]. So it will cost the employer.’ ‘The cost to business is significant,’ confirms Glenn Collins FCCA, ACCA’s head of technical advisory. ‘We have had reports of people taking a day just to get basic payrolls organised for RTI. There is also the cost of ongoing training.’ Complexities in the system need to be mastered, such as remembering the need to tick a box for temporary workers to prevent them potentially being wiped off the system.