RTI – what have we learned in the last week?
Last Wednesday (8th October) HMRC told their stakeholders that they had identified an issue with the P800 tax reconciliations that are sent each year after year end. we know that over 5m were sent this year, a higher figure than pre-RTI which in itself is not a great vote of confidence in the new system which has been in use for two and half years now. At that point no figures as to the numbers of wrong P800s was given by HMRC, stakeholders were simply urged to get employees who were unsure if their statement was right to check their P800 to their P60, as the P60 would be correct.
on Friday after national press and TV coverage HMRC published a very simple press release on .GOV.uk saying that only P800s sent since 15th September might be wrong. This was a surprise only a day after the initial email that gave no indication of this date. I asked HMRC if they could explain what had happened on 15th September when data from employer year end returns was received by 19th April and P800s had been issued since June and also that the taskforce had been sending examples of thousands of incorrect P800s since June. They have not replied.
On Saturday HMRC were able to be even more precise and tell BBC Moneybox that only 20,000 employees were affected and repeated their assertion that all the issues were because employers had failed to send final FPSs. The RTI taskforce has never been told that HMRC were aware (since April) that many returns had not been received, if they had been surely the issue of P800s would not have started.
We have also been told that EYUs have now been discovered not to have been applied in some cases, no detail has been given.
Given the cost of RTI to employers, the software industry and the taxpayer and the potential impact of incorrect data on the national roll out of Universal Credit, now announced as February 2015, it is no surprise that the ATT has publicly called for a review of RTI. I would support that, as HMRC need the resources to look at issues with both core RTI and their accounting system ETMP ahead of late payment penalties next April and with late/non-filing penalties now in force for large employers.