Sage carried out a survey where they discovered three quarters of small businesses didnt know about the HMRC proposal to introduce RTI.
Is anyone here up on it? What do you think it's going to mean for us as bookkeepers, given that reports will need to be submitted to HMRC on a monthly rather than annual basis, do you think we;ll get more clients through it. Certainly seems to fly in the face of the governments drive to cut some of the red tape for small businesses.
Also given the recent problems with HMRC's systems can you see any issues?
The end plan is for employers to pay gross to hmrc via bacs, when this part happens there will be no need for us, I personally think that this is a move to go to identity card which is supposed to have been scrapped.
In the short term yes we could possibly get a bit more, I am a member of CIPP and a lot of info on this comes from them.
With the mess they make of everything else, would you trust them to pay your wages? You can imagine the mess we'll all be in. I think people should stick to what they do well, the only problem is that HMRC don't really know what that is yet.
I don't think they're up to it. If they were a commercial business, they would have gone under by now. The really upsetting thing is that we have to deal with them on behalf of clients and they are making the job harder.
A recent post I read somewhere, which I agree with very much, is that organisations like HMRC need to stop thinking that they provide a service and we're all customers. They don't, and we're not. If they were we'd go elsewhere, but they're the only shop in town. It's going to be difficult to fix it.
Sometimes it verges on the crazy. I have waited about 4 month, and sent 4 letters and forms to them for agent authorisation, and get nowhere. They either ignore them, lose them, don't get them or something else. It's not helped by the fact that that team don't have a phone or email (WHAT? REALLY?). You can sometimes get someone to send them a message to call you, but god help you if you go to the loo at that moment, they'll never call back.
Well said. I've delighted telling my sister more than once "if i were an actual customer, I'd shop elsewhere." They should learn how to collect PAYE properly instead of sitting round discussing pie in the sky consultations.
One issue that worries me is if filing monthly reports will give HMRC 11 more penalty opportunities á la CIS.
If the motive is to maximise the public purse, I think there's better ways to go about it. I've allways thought it's far to easy to phoenix a company in the UK compared to othe countries. It seems to be widely accepted that it's ok to "knock the tax man" for crown debts.
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Tony
Responses are intended as outline only. Formal advice should be sort from your Institutes Technical Department or a suitably qualified Accountant.
What annoys me about dealing with HMRC is you never get the same person, and everytime you need to make a call, you have to start again at the begining.
What's also staggering is people who work in HMRC don't know who to call because files are moved around so often. Even the likes of Special Compliance have this problem.
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Tony
Responses are intended as outline only. Formal advice should be sort from your Institutes Technical Department or a suitably qualified Accountant.
Am I right that Paragraph 6.6 of the above consultation document is hinting we're looking at 2018 before RTI begins to hit employers with under 50 staff ?
The original consultation talked about "Centralised Deductions", and this may indeed have meant that small PAYE bureau would have been replaced by civil servants.
Is it possible where employers already pay by BACS, that RTI can be introduced seemlessly? Seemlessly or not, HMRC are not exactly famous for data security - bank account details spring to mind.
Liz has mentioned on another recent post of an employer operating incorrect tax codes. I dare say that under RTI this would generate another raft of automatic penalties.
As far as I am aware RTI is agreed and starts 2012. It wont necessarily involve us getting more clients as software providers have to amend their programs so have a 'submit' button to send over all the required info. The idea is then to do away with the annual return instead.
RTI is a good idea. It is designed to replace P45s and P46s and to eradicate coding errors. HMRC will actually know what you've earned from where as you go along instead of waiting till the end of the tax year. Also they will be able to enforce payments from employers as they'll actually know how much is due and when, instead of working on no information at the moment and sometimes chasing once a quarter.
The question of course is are HMRC fit to run RTI. Well no, they're not fit to run for a bus. It's highly unlikely that their system will work as it should. However the only effect of this will be that we all need to carry doing as we do now and dealing with wrong tax codes etc. It shouldn't generate any extra work. Maybe it'll even work, its only collecting information, which is what the online SA PAYE CT etc services do already (most of the time).
Centralised Deductions on the other hand, which is still in consultation, is the worst idea since, well, ever. HMRC, who never have any (competent) staff at the best of times, think that they can handle processing and paying wages for the entire country. Now what could possibly go wrong with that!
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Jenny
Responses are my opinion based on the information provided. All information should be thoroughly checked before being relied on.
That's the main worry isn't it; 'they're not fit to run for a bus'. There should be a new consultation "When Shall the Govt Split HMRC Into Half a Dozen Competing Providers".
Having said that I have given the wrong link above and should have given the later Consultation here:-
I too was chasing 64-8 forms which I'd submitting a month ago. A quick enquiry to them yesterday via the HMRC website webmail with the basic details got an acknowledgement within a few hours and a useful email reply this morning. After a quick further phone call, the issue has been resolved.
You never know - this might be a route that works for you too.
It may have been because of the software I was using previously but one of the great leaps forward a few years ago that I and many here will have made in payroll preparation was the ability to 'pre-prepare' fixed salaries and weekly wages for up to 52 weeks in advance. These were often owner-directors or any other wages that stayed the same. I still printout up to 4 months/weeks in advance and place them in unsealed addressed envelopes for those who still like to receive them on paper.
I haven't read that any of the software commonly used will have the ability to 'queue' a number of weeks RTI - eg. Auto-file on Friday 6th, 14th, 21st and 28th etc and without this facility I fear we will be stepping back approximately ten years and being tied to the payroll desk every week again. I'm not sure where to start costing the inconvenience of this. Here is a link from Taxationweb which touches on the costs and the fact that "really small employers .................. outnumber the large employers who are piloting the scheme by something like 1000:1".
A few weeks ago, I did a back-pay calculation for an employee who had received a promotion about 6 months earlier but I'd not been told, despite sending weekly paper payslips. If the penalties are too great, then in this sort of situation I actually fully anticipate mass non-compliance in that the cash book will be doctored to agree with the payroll, purely so the weekly submission can be made on time or inaccuracy penalty evaded. That won't really make state benefits any more accurate, but there seems little doubt now that RTI is going ahead on schedule despite widespread reservations.
Tim
EDIT : broken link
-- Edited by Don Tax on Saturday 28th of April 2012 11:30:23 AM
I think possibly the 'good idea' is to compell employers to keep more accurate payroll records, not just to give the government more up to date information. In that sense it is a hammer to crack a nut and as I've said, there's a risk of it following the law of unintended consequences on the scale of releasing rabbits in Australia.
Originally, the policy of encouraging online filing was to reduce the costs of administering the tax system, create greater certainty for taxpayers and benefit recipients and elimination of error. CIOT are arguing that far from reducing, the costs are merely being displaced and sometimes increased. I can only see that multiplying the filing burden by a factor of 52 or 12 on any employers, let alone the smallest ones is one of those where the overall costs are increased.
There was incredible success in increasing the numbers of Annual Employer Returns not by using sticks (penalties) but by providing cash incentives. I'm yet to hear anything about incentives with regard to RTI, but in any case, on principle I wouldn't support a massively increased filing burden.
From the people who brought you IR35 prepare for the next thrilling roller coaster ride... (Governments change but the people who implement their bad decisions remain the same).
Cheers for the update Tim,
I agree with you as past implementations of other "good ideas" have turned into complete disasters that have cost the country billions. IR35, CSA, etc.
If small business owners believe that they are going to be able to mitigate fines by blaming the bookkeeper then our PII would get seriously expensive for any bookkeeping business offering Payroll service forcing us out of the market which would become the territory of larger specialist companies.
Would that be good for the small business man? They would get more payroll dedicated expertise and provided that there were enough companies offering these services then their services should remain reasonably prices.
On the flip side they would lose their current flexibility and control.
I can see that there would be a concerted push for people paid weekly to be moved to Monthly payments which isn't a bad thing unless you are one of the many living day to day with little if any reserves. Or one of the many who simply find it impossible to budget and they would get through the full months money in the first week (Mmm, thinks of first wife except it wouldn't have taken her a week!).
From that angle I think that implementing this would just be christmas time for companies offering their 4000% payday loans (When are the Government going to throw all of those sharks in jail????).
Then again, whats good for business or indeed those few still with a job is not the thing at the forefront of the Governments mind. The reasons for needing more money are clear and are not actually the fault of the current administration. But I think that they should be concentrating on rectifying the balance of trade rather than trying to squeeze yet more blood from a pretty dry stone.
There is so much that I would change but that would take the thread completely off piste which in this instance I don't want to do.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Yes, there will be a great deal of resistance to moving to monthly payroll but that is the best way to go apart from training clients to do their own payroll. Jenny has outlined the practical improvements in adopting RTI but it is at the cost of a massive filing burden which can only be enforced by stiff penalties. Anyway, I found the Qtac article on Accountingweb quite informative so I hope its ok to link it here:-
Have registered half of my clients for early enrolement starting from September onwards. The clients started in the "trial" time will not be subject to fines so hopefully build good habits.
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Donna Curling - Complete Book-Keeping Ltd (CBKLtd) - 07939 101900
