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HMRC accommodates large employers with a change to RTI transitional arrangements

May 31, 2012

HMRC have reversed their decision to phase out the large employer EDI reporting channel in April 2014. This original decision, made only a year ago to deliver savings for taxpayers, invited a strong reaction from interested groups who have now seen this policy postponed.

Described by HMRC as a system for the largest employers with employee numbers in the ‘thousands’, EDI or Electronic Data Interchange is a reporting channel used by large employers to pass tax data to HMRC.

This latest decision on EDI follows another earlier postponement of the closure of EDI. HMRC’s original announcement to close the EDI channel in order to rationalise the number of employer reporting channels following HMRC’s commitment to BACS as their strategic channel choice for RTI,  was met with considerable opposition from EDI user groups.

Simon Parsons, the long-standing head of IReeN, the Inland Revenue Electronic Exchange Network, the principal EDI user group, representing the interests of EDI users, was reported in May 2011 as being “delighted that HMRC has announced the deferral” by Payroll World.

HMRC have now announced that they “envisage we will retain EDI until at least 2016-17”, effectively postponing a decision on the EDI channel for a further two years.

HMRC made clear that current RTI channels are “a transitional arrangement” and explained that keeping EDI open until April 2017 would allow [EDI users] time to implement the interim RTI solution.

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