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HMRC and DWP to use RTI data to conduct further trials

November 13, 2014


In an update to members, the Association of Taxation Technicians has reported that two trials regarding tax credits are to take place during November.  HMRC will be examining instances where RTI information regarding a claimant does not match that reported by the claimant, and the DWP will be running a trial of digital Universal Credit in London.

From the 17th of November, HMRC will be examining mismatches in earnings data in a group of 1000 claimants.  Where the earnings data of these pilot claimants collected through RTI submissions does not match that given by the tax credit claimants, the individual will receive a text message prompting them to contact HMRC to discuss the matter.  The ATT said that claimants “will need to check the text message carefully to see whether HMRC intend to make changes to their award”, implying that where HMRC does not hear from the claimant, they will use the data they have to alter the amount of benefit this person receives.

Where a tax credit claimant has contacted an ATT member for advice, the Association says members should tell the individual that the RTI data “will not include any allowance for deductions for pension or gift aid so claimants should not just accept that HMRC data is correct.”  This advice agrees with the continuing concerns voiced by agent representative bodies over the accuracy of RTI data, emphasising the importance of taxpayers being vigilant over their tax affairs rather than trusting that HMRC has the correct figures.

In a separate trial also related to tax credits, the DWP will be running a test of Universal Credit in the Sutton area of South London at the end of this month.  HMRC has advised the ATT that they will not be accepting tax credit claims from the (as yet unnamed) postal code area while the trial is running.  Those in this postal code area must send tax credit claim forms to HMRC by the 26th of November, or they will have to claim Universal Credit.  Tax Credit claims submitted after the 26th will be rejected.  The ATT update states that “Certain individuals may be placed at a disadvantage if a Tax Credit claim would have proved more beneficial for them.”

These trials appear to signal the Government’s drive to use digital earnings data to validate existing tax credit claims and its commitment to push ahead with the national deployment of Universal Credit set to commence in February 2015.  However it remains to be seen whether the data coming in to HMRC via RTI is being correctly aligned to taxpayer accounts to properly support these calculations.

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