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Real Time Information timetable is ‘wholly unrealistic’, says Tax Faculty

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Real Time Information (RTI) is ‘on track and proceeding well’, according to HMRC, but the ICAEW Tax Faculty has warned that the proposed timetable is ‘unrealistic’. It is ‘alarming’, the Faculty said last week, that there are ‘so many [issues which] are unresolved’.

As HMRC prepares to pilot the service with volunteer software developers and employers from April 2012, it has reminded employers who are not taking part in the pilot that they still need to prepare for the new system.

‘Although RTI will be a highly-automated process, with reporting to HMRC embedded into an employer or pension provider’s payroll software, you need to think about what RTI means for your organisation, how you run your payroll and your business processes,’ HMRC said in issue 40 of its Employer Bulletin, published yesterday.

Guidance for employers

Detailed guidance on RTI is provided on the HMRC website. Two HMRC webinars and a video are also available:

Real Time Information – an overview

Accurate Employee Information Matters – it can save time and money

Accurate Employee Information Matters - it can save time and money (YouTube)


    Commenting on draft Finance Bill provisions, the Tax Faculty said: ‘The employer tax system works because local HMRC staff have in the past accepted “local agreements” with employers and/or the process has been sufficiently flexible to accommodate workarounds.

    ‘As RTI will be a computerised process, it will be difficult to accommodate such workarounds. We are assisting HMRC to help ensure RTI will work for HMRC, employers, employees and third parties such as agents and payroll bureaux. As well as being part of HMRC’s Customer User Group we have, just in the last two months, met or have arranged to meet HMRC to discuss, inter alia, the submission channels, leavers, agents (in particular payroll-only agents), small employers, expatriates, pensioners, education and communication, etc, etc, etc.

    ‘The extensive informal consultation undertaken by HMRC is welcome, although it has highlighted the size of the task to have RTI fit for purpose by [April 2013] when it is made mandatory.’

    Many of the Faculty’s concerns were raised in a recent submission on the draft RTI regulations. It warned on 17 January that RTI was ‘an ambitious project with a demanding timetable which is being unduly rushed’.

    Annual returns

    HMRC has suggested that employers file their annual returns P35 and P14 for 2011/12 as soon as they are ready, now that ‘virtually all’ employers are required to file online. ‘The return for 2011/12 must reach us by 19 May 2012 or penalties may be applied. There will be no period of grace because Extra Statutory Concession (ESC) B46 came to an end on 31 March 2011,’ HMRC said.

    Other matters

    The Employer Bulletin also includes diary dates for employers and articles on and avoiding penalties for late payment of PAYE duties; income tax allowances, bands and rates, and NIC thresholds and rates, for 2012/13; and changes to tax relief for pension savings.