The call comes as The Daily Telegraph1 reports this morning on a leaked copy of an HMRC email which indicated that several thousand employees have received incorrect information about underpayments or overpayments. This is the latest in a succession of problems that has beset HMRC’s flagship RTI system of reporting employees’ pay and tax to the Revenue2.
ATT President, Natalie Miller, commented:
“This is an alarming revelation and further underscores the need for collaboration with external stakeholders, all of whom have a vested interest in the success of RTI.
“We have been drawing HMRC’s attention to the quirks and complexities of RTI in meetings and correspondence from its inception. We have also highlighted the significant burdens it places on employers and agents. What we are seeing now are real and serious practical problems for possibly many thousands of employees at a time when building confidence in the system is crucial. Some of those difficulties might have been avoided if HMRC had heeded advice from ATT and similar bodies at an early stage.
“In light of this latest revelation, we are calling for an urgent review of the RTI system to ensure that it is fit for purpose. This is essential because every employer and employee is entitled to know that PAYE is being dealt with properly. It is doubly important because the RTI system underpins the Universal Credit3 system that is being rolled out by the Department for Work and Pensions to replace certain state benefits.
“If, as HMRC’s reported comments suggest, the particular problem arose because employers had failed to send in final payment statements for the full 2013/2014 tax year, that suggests two things. Firstly, that the process is simply too complex for employers to understand. Secondly, that either HMRC know the information to be incomplete and are failing to address this before placing reliance on the information, or HMRC do not know the information is incomplete, which raises the equally worrying prospect that the system cannot identify when important information is missing.
“It is in nobody’s interest that RTI stumbles from problem to problem; that threatens its credibility. We all need a system that does what it says on the tin. At the moment, Real Time Information just does not seem to be delivering information that is real. What we need is a thorough investigation of what has happened by a team which includes not just HMRC personnel but external specialists. Only that will give the necessary degree of confidence in the system that is vital for everyone who depends upon it (employees, pensioners, employers, payroll bureaux, tax advisers, other parts of government and HMRC itself). The review’s remit should extend to other areas of RTI where systemic problems have been identified. The ATT and many other professional bodies stand ready to assist HMRC in that review.”
Notes for editors
1. The Daily Telegraph article, Five million UK workers face uncertainty after tax bills wrongly calculated twice in HMRC blunder, can be read in full here.
2. Further information on HMRC’s Real Time Information system, designed to streamline employer reporting of PAYE, can be found here.
3. Further information on Universal Credit can be found here.
4. Association of Taxation Technicians
The Association is a charity and the leading professional body for those providing UK tax compliance services. Our primary charitable objective is to promote education and the study of tax administration and practice. One of our key aims is to provide an appropriate qualification for individuals who undertake tax compliance work. Drawing on our members' practical experience and knowledge, we contribute to consultations on the development of the UK tax system and seek to ensure that, for the general public, it is workable and as fair as possible. Our members are qualified by examination and practical experience. They commit to the highest standards of professional conduct and ensure that their tax knowledge is constantly kept up to date. Members may be found in private practice, commerce and industry, government and academia.
The Association has over 7,500 members and Fellows together with over 5,000 students. Members and Fellows use the practising title of 'Taxation Technician' or ‘Taxation Technician (Fellow)’ and the designatory letters 'ATT' and 'ATT (Fellow)' respectively.More Articles by Chartered Institute of Taxation (CIOT) ...