Real Time Information (rti)
Specified charge Where HMRC have not received (or haven’t registered as receiving!) an FPS or Nil EPS for a tax month they can legally estimate the payment due based on the last 3 FPSs or 1/12th of the prior year’s total liability and can enforce that debt. Where an employer notices a specified charge shown on the viewer and knows a file was sent this is an immediate cause for concern and should be logged with the disputed charges team. Current issues All of the years since RTI was implemented in April 2013 have been a learning curve for HMRC and employers, agents and pension payroll providers. Some areas of concern emerged and some remain unresolved: • Whilst HMRC’s RTI systems appear to be handling ‘real world’ scenarios much better and improves each year, where taxpayer data has to be amended often, it continues to perform poorly. This continues to be of particular concern around the fundamental activities of starting and ending employment where new employment details are often implemented sooner than those of the corresponding leaver. COPYRIGHT © 2021 THE CHARTERED INSTITUTE OF PAYROLL PROFESSIONALS A number of routine scenarios such as changes of start or leave date or taxpayer designatory data (such as DOB or marital status) lead HMRC to duplicate the taxpayer’s record on receipt of the FPS. This can have the effect of: • causing a 0T tax code to be issued to the taxpayer who is perceived to have two employments with the same scheme simultaneously • overstating the scheme liabilities as the YTD tax, NICs and student loans from the erroneous record are added in twice. HMRC’s new accounting system often takes these incorrect liability figures and: • outputs them to the Liabilities and Payments Viewer, and • expects payment to be made based on the overstated liability and initiates compliance activity when it’s not. Since 2017 HMRC’s use of “dynamic coding” has caused alarming fluctuations in coding for some employees. In many cases the new system appeared to react too quickly to fluctuations in pay and hence applied wholly incorrect tax codes. In some cases employers were unlawfully ignoring code changes in order to prevent financial hardship. For 2019, HMRC promised to make attempts to smooth the application of new codes and renamed the process “in year triggers”. To date this process does not appear to have solved the basic problem and it is expected to continue to cause issues during 2020 and beyond. No printing, copying or reproduction permitted. Work continues with HMRC to try to identify and address flaws in the design of the two central systems. Since April 2017 significant improvements have been made. It remains the case, however, that these issues, unchanged since 2018, impact more on the very smallest employers.
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