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HMRC over budget on RTI

December 10, 2012


HMRC has admitted development of Real Time Information (RTI) reporting of PAYE is over budget.

Some £124m had originally been allocated to the project in 2010, said David Gauke, Exchequer Secretary to the Treasury in response to a Parliamentary question from Stephen Timms, Labour MP for East Ham. This budget has now been exceeded says David Gauke and the scale of the cost overrun is being assessed.

However, David Gauke went on to blame public consultation and changes made to the design of RTI, which have resulted in additional costs. Plans for the RTI pilot which began in April 2012 have also changed, said Gauke. Although as reported on 6 November, the number of employers volunteering to join RTI early and participate in HMRC’s pilot phase will be significantly lower than the 250,000 pilot employers HMRC themselves planned for.

A spokesman for HMRC said the RTI pilot had contributed to an increase in costs, according to reporting from Payroll World:

“In response to feedback from employers and software developers, we significantly increased the scale of the pilot, so we are now running a year-long pilot catering for up to 6m individual records,” he said.

“The pilot has enabled us to learn lessons and to resolve issues before full roll out. However, increasing the length and size of the pilot and changes to the design of the RTI system in response to public consultation, has increased costs. We are in the process of reviewing the business case in the light of the pilot and determining the scale of the increase.”

Stephen Timms was himself reported by Computer Weekly that government’s response contradicted HMRC’s assertion the programme was running to schedule.

"Until very recently, HMRC insisted this project was on budget. Now they say they don't know how much it will cost," said Timms.

"HMRC also recently announced that penalties for late RTI submissions will not be collected from employers in the first year of RTI. That sounds like recognition the system won't work properly until a year late.”

Gauke said: “HMRC are working to determine the scale of the increase and are looking at how these additional costs will be met.”

The systems behind Universal Credit have also hit major problems, with the £2.2bn project running significantly over budget. The senior leadership team recently underwent a major overhaul as Philip Langsdale stepped up to oversee the Universal Credit overhaul, with programme director Malcolm Whitehouse among a number of senior figures to step down.

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