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HMRC Real Time Information pilot numbers are lower than expected

November 6, 2012


HMRC’s PAYE Real Time Information (RTI) pilot which is in its third and final phase has attracted fewer employers than HMRC forecast.

HMRC began piloting Real Time Information reporting of PAYE in April 2012 with 10 employers, (including HMRC itself,) joined shortly afterwards by a further 300 employers. The second phase of the pilot began in July 2012 with some 1,500 employers. November 2012, which marks the start of the third and final phase of the pilot which is due to run through to March 2013 was expected to see up to 250,000 employers join the Real Time Information pilot, according to HMRC.

Figures obtained from the RTI helpdesk of SAGE the Newcastle based accounting and payroll software company confirm that SAGE is bringing only 4,000 payroll customers into phase three of the pilot in November. Based on market estimates provided to, the overall number of new employers joining HMRC’s November pilot is not likely to exceed 10,000. With a similar number scheduled to join the pilot in March. This indicates a total number of pilot employers of some 30,000 by the end of March, significantly lower than the figure of 250,000 HMRC has indicated.

Under HMRC’s guidelines, employers wishing to join the pilot must approach their software provider to do so, not HMRC, although HMRC has also to approve each pilot employer individually before they can join the pilot. Employers sponsored by their payroll software providers are effectively ‘hand held’ as HMRC describes it by their software companies through pilot RTI reporting. This means that volunteer employers joining the pilot can expect a much higher level of support than will be available to those employers mandated into RTI from April 2013.

However, despite HMRC’s attempts to create incentives for employers to join the pilot by waiving the requirement to run an end of year employer return for 2012/13, the overall level of employers willing to join the pilot remains very low. Some 1.4 million employer PAYE schemes will have to report RTI by law from April 2013, with the overwhelming number of employers commencing RTI reporting in April 2013.

It is not clear whether the commercial software companies responsible for delivering HMRC’s target number of pilot employers had committed - given the costs of doing so - to support the 250,000 target number of employers in the pilot HMRC has talked about. 250,000 pilot employers now looks like an aspirational number from HMRC with no realistic expectation of being realised.

The low level of employer numbers in the pilot means that the number of employers commencing RTI reporting at the same time in April 2013 will not materially change. It was clear that HMRC wanted to reduce the initial impact on the Government Gateway and its internal RTI systems by encouraging significant numbers of employers to join early but this will not now happen.

Phil Nilson, HMRC RTI stakeholder engagement team, was reported by Payroll World as saying that the pilot had been a “runaway success” even though he explained in the same speech to Payroll World’s autumn conference that HMRC wanted to recruit more large employers to the pilot.

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