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.
Thanks Shaun. My OCD reading on RTI must rival your Zulu Wars knowledge by now lol
I had on in the background the 2-3 hours of WebTV from the Works and Pensions Committee meeting on the 17th. Luckily only the middle 1/3 really concerns us. The Chair, Dame Anne Begg was definitely anti RTI and Teresa Pearce (a London MP who's done a stint at PWC) was well informed and batting for my/our side but hardly looking for boundaries.
To save watching the dirge, this is the transcript :-
Our concerns are addressed at Q249-Q269 and Q289-Q296
Glenda Jackson is anti-establishment but useful to have onside. I'm considering writing to her with ammunition.
Quite revealing his Iain Duncan Smiths snide remark at Q257 "most of these companies, if they are half well run, are collecting the data as they go along."
Yes Minister, they would be WELL RUN if they didn't have to keep filing reports on a Friday afternoon to politicians. Don't think he's heard of the self employed employing people.
Interestingly, the FSB are still talking as if only monthly reports will be required, not every time a wage is paid.
Some interesting reading in there Tim. Many thanks for the link.
The snide comments have echoes of IR35 where ministers were informed by those who either didn't understand the complexities themselves or were working to other agenda's.
I'm not sure that IDS is the right person for this job. Somone like Digby Jones or David Tweedie would to my mind have been much better choices for a role of this level of importance.
kind regards,
Shaun.
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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.
I wrote a couple of weeks ago to the general email address, but this weekend wrote to five members of the Works and Pensions Committee. I may follow it up with an email to the two Ministers. My particular concerns are with the smallest of employers and the self employed making Universal Credit claims.
I received an immediate, very brief, but positive reply concurring with all the points made. I don't intend to publish but my major points were as follows :-
A gentlemans agreement to pay a fixed wage means that fully compliant employers have no need to visit PAYE every week. Indeed they can do PAYE far in advance so that a payslip is always available. RTI is therefore up to 52 additional, penalty-driven deadlines - totally unheard of for micro businesses.
There is no need for repeated filing of unchanging net pay, especially where there is no benefit claim. RTI is only necessary for variations, starters and leavers.
A contractual 'handshake' trounces the tax system. No employer is going to break that contract because of a slight change in tax coding.
The cost to the smallest employer might be the same again for accounts and self assessment services ie. doubling fees
Payroll may be delegated to e-filing organisations but at a cost of access to quality HR advice (ty Shaun)
Many small traders already run two simultaneous accounting systems - A cash basis for VAT and an accruals basis for Income or Corporation Tax. There must not be a third basis for any reason whatsoever, particularly where vital state benefits are concerned.
I made other, minor comic and blunt points, pulling up the government on misinformation that was bandied about - see Q257 and Q260 at link in my previous posting.
I don't really think this is a winnable battle, but come over all caped crusader when it doesn't register that all such bureaucracy has a cost. Its always proportionately more for the small guy.
Me. let people know if I think that they had made a mistake. But I'm so shy and retiring Tim.... lol
Of cause I would matey but everything looks good to me so far.
Lets hope that by "passed on to the select committee clerks" that doesn't actually translate to filed in the big round under desk filing cabinet as it does not comply with required thinking on the subject matter!
talk in a bit,
Shaun.
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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.
Thanks for your input. The main point is an objection to any more penalty-driven deadlines for micro-businesses. I believe that my objections only cover up to 4% of employers. These are though, the smallest ones, and are always more profoundly affected by any increase in bureaucracy.
Firms that pay fixed wages/salary have no need to visit the payroll desk with any regularity; if indeed, there is a payroll desk.
Secondly, Universal Credit claimants will be a minority of wage earners so this is a hammer to crack a nut.
Thirdly, quarterly reporting would be quite sufficient for tax coding purposes. HMRC are at last reconciling PAYE cases so this is now no reason to introduce RTI.
In other countries, (off the top of my head, but I think Ireland and Denmark), there is a much more interactive income tax website, where taxpayers can update their income and changes in circumstance. Our Revenue is notorious for failed IT projects and also have a history of failing to use the information at their fingertips - for cross-matching NI numbers for example.
This is the Govt. that set up the Office of Tax Simplification. For small employers this is the biggest lot of 'double-speak' since the War Office was renamed the Defence Ministry.
Phil, you've used the key word here; 'most'. Most businesses pay by Bacs and, as you say this will be just an additional button. In the case of cash wages, RTI is a nonsense anyway! There is no direct link between an RTI declaration and the amount of money handed over.
Tim
-- Edited by Don Tax on Wednesday 10th of October 2012 12:03:06 AM
I am not sure I get the big hoo haa with it. Most businesses that have employees will do a payroll prepared on software, either on a weekly or monthly run. All it will need is for software providers to have a button saying file returns after each run is done. Better quality reporting and information all round in my opinion.
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I am not sure I get the big hoo haa with it. Most businesses that have employees will do a payroll prepared on software, either on a weekly or monthly run. All it will need is for software providers to have a button saying file returns after each run is done. Better quality reporting and information all round in my opinion.
I know, I know, it's just an extra button for most employers.
It all depends on the penalties. If RTI is enforced with the heavy hand that most seem to anticipate, a likely scenario is that employees will disappear off the payroll altogether. Alongside that would be more and greater fraudulent Universal Credit claims.
I suppose that particular consequence would hasten the day that cash ceases to be legal tender.
Basically, for these 4% or so of employers, the only current burden of PAYE is paying it. Software is cheap and accurate and deductions can be worked backwards long after the event or net pay calculated far in advance.
Depending on the penalties, RTI reporting will mean far more regular too-ing and fro-ing with additional confirmation and interventions. It will likely mean a new fee payable to the accountant. Better quality information? ............Sometimes, but for what reason? It's not as if it is the employer making a claim.
Shaun will tell you the difficulties RTI will create with owner directors, and there again, it will be the small man who suffers the most. Basically, they should only introduce this for those already using BACS.
Here's another link which describes some of the difficulties which will be encountered.
Will quarterly or even annual be an option with RTI?
I like the sound of it but that would not seem to fit in with universal credits which is to my mind the real force behind RTI
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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.
Hi Shaun. Apologies, I missed this one. The essential thing is that a submission should be made on or before the payment is made (but I understand you also get a week afterwards.) Here is some of the blurb at:
Correction - the situations where a week to file will be rare and subject to review - see footnote link.
If you pay your employees weekly, you must send a weekly FPS, or if you pay monthly, a monthly FPS. If you have some weekly and some monthly paid employees, you'll have to send an FPS both weekly and monthly. If you pay your employees more than once in a week or month, you must send an FPS on each occasion. Each FPS only needs to contain information about the employees you are actually paying.
When you need to send an FPS, you can split the information into batches if that is easier. For example, you can send one FPS for employees and another for directors.
* If you haven't paid anyone at all in a pay period, then you must send an EPS instead of an FPS. See the guide 'What payroll information to report' - there's a link at the end of this section
** You can send your FPS to HMRC in advance, so if for example payroll staff are going on holiday for two weeks, they can make three separate weekly submissions immediately, one after the other, before they leave.
* Yes, you will be able to file quarterly or annually as the pay frequency is declared on the Full Payment Submission. There is also an 'irregular payment' setting. Without this indicator the Revenue will assume the employee has left.
** This gives scope for not being tied to the desk every week. This is the most I've read about the definition of 'before' but either way, the longer in advance one files, the greater the possibility of errors. The error penalties will, of course be fundamental to how much of a burden RTI becomes.
Am I the only one here thinking, Mmm, April the 7th, just put in 11 FPS's for minimum salary and then come back in 11 months to make the end of year payment once you know the salary available for the year.
Spot the accountants! Give us a change of legislation and we'll spend our time working out all the options to work around it.
Compliance is for wimps. lol
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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.
What bothers me most is weekly and I'm thinking of one of my clients who has 3 pubs and does weekly payroll. It's going to be an absolute nightmare because she gets info from the Manager's and it sometimes takes several weeks before I get P46 information yet the people obviously want their weekly pay. Currently they are put on OT until the P45/P46 is passed on but this will have to be done before the first payroll. Also I get the hours info anytime from Monday evening to Wednesday evening for pay date ending the previous Sunday and if either me or her is on holiday she estimates the hours and it gets put right on our return. I'm not looking forward to it at all.
Sounds like one for the pilot scheme, Sheila. Either that, or is there any way the employees can be paid on the day of the shift, which gives scope for the 7 days referred to in my previous post.
http://www.hmrc.gov.uk/rti/employerfaqs.htm#14
The conditions for a week afterwards are fairly stringent, so for the vast majority it will be 'on or before'. I will amend my previous message.
