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PAYE RTI Payroll software developers reveal fears for HMRC’s implementation strategy

October 29, 2012


HMRC’s technical plan for the implementation of Real Time Information for PAYE has come to light as a result of concerns expressed by commercial software developers.

Commercial payroll software developers are not working to a defined HMRC specification to write RTI applications for their payroll software, as is standard in complex software application development. Instead, HMRC is continuously revising the specification commercial PAYE RTI payroll software companies have to follow as HMRC’s RTI “pilot” progresses.

HMRC’s RTI “pilot” is not therefore a pilot in the normal meaning of the word, which is how it has been understood by all connected groups. HMRC’s pilot does not test finished software but is in fact being used to work up the final specification for the software that will ultimately be released to employers.

HMRC is using the pilot to identify changes needed in payroll providers RTI software reporting capabilities, the way RTI software communicates with the Government Gateway and other RTI reporting requirements that will have to be accommodated by developers in time for when RTI goes live in April 2013.

It is highly likely that HMRC will need to continue to amend the final RTI system specification for software developers right up to the end of the pilot in March 2013 because identifying the full complexity of payroll reporting depends on the number of employers participating in the pilot.

HMRC’s unusual implementation strategy came to light as a result of concerns expressed by an RTI software developer in a UK internet business chat room.

At the end of March when the HMRC RTI pilot concludes, payroll software companies will compile their software with the final code changes specified by HMRC and then release RTI software to the market. The RTI software programmes released to employers by commercial payroll software providers will not therefore have been tested outside of the small numbers of employers volunteering to participate in HMRC’s “pilot”.

Under the Carter Principle, laid down for major HMRC technology projects by Lord Carter of Coles, HMRC is required to test new IT systems before they are fully deployed for a period of not less than 12 months.  As HMRC’s 12 month RTI “pilot” does not in fact test an unchanged platform and capability, HMRC appears to be in breach of the protocols that govern its introduction of new technology.

HMRC is relying on its RTI ‘pilot’ scheme for participating employers who operate PAYE, to identify the complexity of payroll operations which RTI software will need to be able to manage. As the number of employers participating in the pilot increases, so will the number of required software changes. The number of required changes identified will peak just before PAYE RTI goes live, giving no time to test last minute changes to RTI software.

An unnamed developer on the UK Business Forums website said “the pilot is checking that software can process a message format that will be dumped in favour of a completely new format on the day of go-live.”

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