Burying good news? HMRC extend RTI easement
Pre-election purdah prevents civil servants from publishing material relating to the EU referendum. It runs from 27th May until 23rd June. However, it also seems to be an opportunity for business as usual to grind to a halt – (the Making Tax Digital consultation documents will now not be released by HMRC until late June, what have they to do with the referendum?). Is it also an opportunity though, to slip out good news for employers and embarrassing admissions for government? At the end of last week one of HMRC’s employer stakeholder groups was told that the 3-day easement, allowing employers to file their FPS up to three days after any payment date in the file, would continue until 5th April 2017.
It was not until yesterday afternoon (23rd May) that an update appeared on .gov, but it was so subtle you could easily have missed it. Both the easement, and crucially risk-assessed penalties, will continue throughout this tax year before we will have a new PAYE penalty regime in Finance Bill 2017 – presumably in place from 6th April 2017, not announced 7 weeks into the tax year.
The announcement reminds employers that they shouldn’t rely on the easement on a regular basis (it is very unhelpful for accurate Universal Credit payments if FPS data routinely arrives late), but as penalties are risk-assessed and HMRC are so strapped for resources, it very much feels like we have another tax year with no effective PAYE compliance regime.
So does the good news of the continuing easement, mask the bad news that the RTI data held by HMRC in its various databases is still not fit for automated penalties? what happened to ‘digital by default’?
Last week during the agent services webinar, listeners were told that the problems with incorrect data being displayed on clients’ business tax accounts would be fixed very soon, as HMRC would be ‘sourcing data from a different system within HMRC’. If there is a holy grail of clean data i.e. the data as it left the employer and agent on the FPS/EPS, perhaps the agent services team could tell the rest of their colleagues? All of us would then find our day job much easier, and we could have the level playing field of the automated PAYE compliance regime that RTI promised using sound data.