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RTI Teething Problems

Whilst almost all 1.9m PAYE schemes are now live on Real Time Information, HMRC has admitted to a number of problems with implementation. There have been several announcements on the HMRC website following the identification of so called root cause problems. These have included clarification of the dates on which HMRC updates the employer’s online account facility, since delays had resulted in an understated charge or no charge being shown on the employer’s account.

HMRC’s Debt Management and Banking (DMB) department is responsible for processing declarations, receiving tax payments and taking action to collect late returns or payments. One recent announcement has addressed the problems many PAYE schemes are encountering when trying to reconcile what they owe with the DMB department. These problems have led to cases where the DMB has chased for payments that aren’t actually due. HMRC’s reaction has been to set up a dedicated team to identify the cause of the discrepancies and publish a report of its findings. From 15 October 2013 HMRC also started issuing a series of generic notifications to employers: Non Filing; Late Filing; Late Payment; and Reminder about Late Payments. The aim of these notices is said to be to assist employers to get ready for 6 April 2014 when in-year penalties for late reporting and payment will replace the current end of year penalties.

HMRC has also recently introduced new helplines and published new information about its debt collection procedures. This includes guidance for agents on Time to Pay (TTP) and how it works. The guidance stresses HMRC’s legal duty to be confident that the TTP arrangement is for the shortest period of time possible and that the business can afford to pay the agreed instalments, whilst keeping up to date with taxes falling due during the TTP period. TTP will not stop interest accruing and any applied penalties/surcharges will normally stand, but a TTP arrangement will prevent further penalties being added.

It is clear that despite all the initial teething problems, RTI is here to stay. Businesses should take every step to ensure that they are compliant. If in doubt, seek advice!

 

 

Date: 24th March, 2014
Author: Caroline Stark

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