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Full review RTI to be undertaken by HMRC

December 3, 2014


The Office of Tax Simplification has confirmed that HMRC has agreed to conduct a full post-implementation review into RTI.  The OTS recommended the review in their report into the Competitiveness of the UK’s Tax Administration, published in October, among other suggested measures relating to RTI. 

Writing in a blog, Head of the OTS Jeremy Sherwood said:

HMRC has accepted our proposals to conduct a post implementation review of RTI (Real Time Information) and to improve assistance to businesses with greater use of email and better telephone services with appropriately trained staff along with many other administrative changes.

One commenter on the blog asked who would be carrying out the review, and if it was HMRC whether it would be an “objective review that asks for opinions from employers and tax agents”.  Sherwood replied that it would be undertaken by HMRC, but no further details were currently available. 

In a letter to the OTS, Financial Secretary to the Treasury David Gauke thanks the OTS for their work and sets out the Government’s response to each of the recommendations made in their report.  Some of the recommendations relating to payroll taxes and the Government responses are given below:


Payroll Taxes

Chapter 5


Income Tax and National Insurance should be harmonised and integrated as far as possible.



HMRC should conduct a post-implementation review into Real Time Information, and whether ‘on or before’ reporting is necessary and what further scope there is to extend / harmonise easements for small employers.



Legislation needs to be amended to allow employers to give authority for 3rd parties such as software companies to deal with HMC on payroll issues.



It should be possible to set up annual schemes through a structured email facility.



The RTI reporting rules require a date of leaving employment to be no more than 30 days later.  This may not agree with the actual date used for many employment entitlements and the guidance should reflect this.



Commenting on the announcement of the review’s acceptance by HMRC in her own blog, payroll expert Kate Upcraft, who chairs the taskforce formed by stakeholders (following HMRC's disbanding of its own RTI Customer User Group)expressed the hope that although the OOB rule of RTI would be the key concern of the review there would be the opportunity for members of the stakeholder taskforce to contribute to the review and that it would take a broad look at RTI.  Upcraft said that the stakeholder taskforce had discussed with the Office of Tax Simplification the impact of RTI on employers and payroll agents, particularly the additional cost and administrative burdens caused by RTI.

While acknowledging that RTI’s introduction had been “relatively painless” for most employers, Upcraft points out that wherever there have been software problems or disputed liabilities the introduction and continuing operation of RTI had been “anything but plain sailing”.  She also noted that many of the issues with RTI had become apparent in the pilot phase but still “progress has not been made addressing them”.

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