Since RTI started, we are told that the majority of employers have come on board and have been submitting successfully and all is working well. However, for many employers this has not been the case, and although they have reported RTI correctly, they have been inundated with apparent underpayments due to discrepancies between the employers Full Payment Submission (FPS) and HMRC’s NI and PAYE service (NPS) which shouldn’t happen. We were all told that whilst RTI was bedding down there would be no penalties for this tax year, yet several employers have been pursued for late payment penalties, fines and threats of interest.
As a bureau, we correctly submit the FPS payroll report for RTI on each pay day; the client pays HMRC the correct amount on time, but somehow HMRC records appear to show different totals and immediately inform the employer that they have an underpayment due. We have been inundated with calls from HMRC and clients asking us to explain why HMRC claim they owe more than they actually do. We don’t have the answer and HMRC’s Debt Management division cannot provide us with that detail, as all they have is a total owing.
In its annual report to HMRC, the National Audit Office identified some shortcomings in the RTI project as it went live. By mid-May this year, 10,000 duplicate employee records had already been created, with HMRC apparently unable to ascertain the root cause. The system went live with shortcomings identified in relevant system capturing and reconciling data and payment coming in. There is no budget for contingency and corrective work where errors are discovered.
Employers are being ask to look on their employer dashboard on the HMRC website, but HMRC have errors in their systems, and the amount shown on the employer dashboard is not necessarily the amount reported on the FPS. It’s the amount tallied from HMRC NPS records. Many employers are finding their cases being passed to HMRC’s technical department, but we haven’t heard back from them so far….HMRC need to fix their problems and reconsider their policy of pursuing employers appropriately.