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HMRC is adamant that RTI is working – is it?

I have to admit that it was far less of a disaster than we thought it might be. Yes, there were many long phone calls, changing of the goal posts and annoying glitches to be handled but they were handled without any catastrophic meltdowns. Just. HMRC’s phones must have needed replacing by the end of last year the amount they were being used. And you would have thought the holding music could have been a little more engaging given the audience numbers it was getting.

That aside though we do seem to have a more effective, more informative and modern PAYE system in place with RTI. HMRC on the other hand still succeed in baffling us with errors. As an article by accounting web reports – 400,000 organisations earlier this month received late filling alerts in error: Full article. HMRC promptly gave out the advice to ignore those messages.

Their reason, straight from the director general for personal tax, was that though they had decided not to send out the messages – they had not got to the system quickly enough to stop them. I can just imagine a HMRC employee dashing across the room and diving for the ESC button on a computer only to realise the 400,000 emails had sadly made their way to their destinations. Really! They couldn’t stop the system in time? None of their around 80,000 strong team could stop the system to save their company another wave of embarrassment. Oh dear!

On a more positive note because of the teething problems HMRC have decided to push the penalties back. The automatic penalties for late filing will be pushed back until October 2014 and the automatic payments for late payment until April 2015. So we can breathe a sigh of relief on that front. Ruth Owen came up with some impressive statistics to show that RTI is working – for example – 99% of employer records are being reported in real time and 70% feel that RTI is actually easier than the old system.

She also tackled the key issues of duplicate records, disputed charges, business tax dashboard mismatches and generic network system messages head on. They are aware of them and they are working on them, particularly on the software that needs to detect duplicate reports and deliver messages to the right people. But, with the amount of errors employers have had to contend with Owen wasn’t really left with any place to hide – she had to respond with a proactive defence and she did.

The year end is looming and ultimately we want to believe that the system will be up to scratch but deep down we suspect otherwise. There will be more teething problems and more mistakes made but HMRC took a bold step to update a system that needed to reflect contemporary employment patterns. I think it has done that and we are hopefully nearing the end of the bedding in period. Owen addressed concerns and finished with an odd thing – an apology. She said:

‘If you try and sort out your payroll at the end of the pay period and if it’s not working for you or when you log in to your dashboard and you’re not recognising the figures HMRC is paying back to you, it must feel very frustrating and I am sorry to anyone experiencing difficulties’. (accounting web: Full Article)

Yes we will remain cautious and a little anxious but if they are prepared to apologise for mistakes made then maybe, just maybe there is still a human element to HMRC. So for that alone I stand by RTI and hope we are over the worse of it.