COMPLIANCE
RTI reporting changes: many voices make a difference
Susan Ball, employer tax partner, RSM UK, outlines how people power can drive legislative change, even when it may appear too late
can use to understand whether there is undeclared tax and [National Insurance contributions (NICs)], and similarly with regard to the national minimum wage (NMW), which HMRC has operational responsibility for the enforcement of.” The financial secretary at the time wrote to the chair of the committee with more detail about the uses of the data: “Employee hours data will provide a better understanding of economic activity, and the impact of economic shocks on the income of employees… HMRC envisages that the new hours information will enable them to accurately identify the correct population for any future promote and upstream activity and drive even more complaints from workers about underpayment of NMW.” Those providing government with their views, however, weren’t convinced this data would help with HMRC’s responsibility for enforcing compliance with the NMW “The collective voice of payroll professionals can change things, even at the eleventh hour”
The collective voice of payroll professionals can change things, even at the eleventh hour. Let’s take a recent example. Cast your mind back to the draft Finance Bill published in July 2023, which outlined a new power for HM Revenue and Customs (HMRC) to request additional data from employers and individual taxpayers. At the time we were told the driver of this measure was the government’s ten-year tax administration strategy, Building a trusted, modern tax administration system, published in July 2020. It stated: “Covid-19 has emphasised the value of a tax authority having access to real-time data.” Working together In July 2022, the government followed up the strategy with a consultation, Improving the data HMRC collects from its customers , proposing several potential options for enhancing the range of data HMRC collects. A summary of responses, published in April 2023, set out plans to proceed with some of the simpler options where taxpayers already hold the relevant data. When the Finance Bill was published in July 2023, it listed three specific types of new data to be collected by HMRC, with effect from financial year 2025/26. The first of these concerned employee hours, which the government anticipated would
affect around two million pay as you earn (PAYE) registered businesses. Concerns were raised as this didn’t include details on exactly what employers would be asked to provide. The payroll profession made sure its voice was heard. This can be seen clearly from a report issued in February 2024 in which the Economic Affairs Finance Bill sub- committee called for the nature and quality of consultations to be improved. It also highlighted that HMRC’s resourcing problems had only deteriorated since its last report. At the time, Samantha O’Sullivan, CIPP policy and advisory lead, told the sub-committee that “improving the data that HMRC collects can only be a good thing” providing that “a massive additional administrative burden is not put on payroll teams”. Data confusion The committee, unsure of exactly why the data on employee hours was needed, asked HMRC. Zoë Nettlefield, HMRC’s deputy director, strategic data policy, said, “This work was prompted by the use of HMRC’s data to deliver Covid schemes and the data gaps that we identified in using tax administration data for non- tax purposes.” She explained, “It is the information, the intelligence that we
| Professional in Payroll, Pensions and Reward | October 2024 | Issue 104 16
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