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RTI 'Information Gap' storing up problems for PAYE

July 2, 2013


Details have emerged of an ‘Information Gap’ in PAYE RTI reporting. AccountingWEB, the online forum for accountancy, finance and payroll professionals, on Friday identified issues caused by lack of visibility of employers’ PAYE account balances. Accountants and payroll service providers who report RTI on behalf of clients as agents cannot actually see online the RTI data they have submitted so cannot check it. AccountingWEB makes clear the issue could have serious consequences by storing up future problems for employers because any issues arising from the incorrect reconciliation of RTI data by HMRC will not become apparent until HMRC contacts employers or issues penalties.

This ‘information gap’ arises from the way HMRC applies security restrictions to those acting as agents on behalf of employers. The Government Gateway gives different security permissions to agents and employers.

Once an agent has reported RTI on their client’s behalf, they cannot access that client’s PAYE account to ensure that the information appears there correctly. The agent user IDs issued by HMRC to allow payroll service providers to report RTI do not allow them to access their client’s PAYE account online.  This means that they cannot then check whether their submissions, and client payments made in respect of their PAYE liabilities, have been successfully recorded on the employer’s PAYE account.

The problem for agents is compounded by the fact that many employers do not themselves sign up for a PAYE online account log-in with full access permissions as they assume that their accountant will take care of all PAYE matters for them.  This in turn can mean that neither the agent nor the employer has access to the employer PAYE account balance, and therefore have no knowledge if problems arise.

Rebecca Benneyworth, Chair of the ICAEW Tax Faculty, agreed that the ‘Information Gap’ could be a serious issue, saying that “potentially it could be a big headache.”  She has commented before on the problem of agents not having access to employer PAYE online accounts, and said that it was concerning that agents may not have anticipated the extra costs that could arise as a result of RTI.

Benneyworth added that she was receiving reports of PAYE liability/payment reconciliation errors, saying “I’m starting to get feedback from agents and employers about apparent underpayments of PAYE arising because of how RTI is processed.”

In particular, Benneyworth is concerned that accountants have not factored into their payroll service charges the costs of trying to sort out reconciliation problems potentially long after they arise. She said “My concern for agents is they’ve priced up their service not anticipating this to be a problem … to reconcile the figures on a monthly basis is not something they’ve costed in”.  The article, and the comments from accountants responding to it, reports that numerous accountants are finding ‘misalignments’ of RTI data, resulting in erroneous over - or under- payments appearing on the account.  These apparent errors will require further investment of time and effort by agents to be sorted out, and could strain the employer/agent relationship, as the employer may think that their agent has not done all that was required to satisfy PAYE reporting obligations when in fact they have.

At the moment, an agent could use the employer’s PAYE Online log-in details to see both the liabilities as reported in the FPS and EPS submissions and the payments made to cover those liabilities.  Benneyworth did not feel that logging into employer accounts using the employer’s own log-in details was necessarily a good idea.  The agent tax dashboard, part of HMRC’s Agent Strategy, is under development by HMRC, but no firm availability date has been given.  The dashboard will allow agents to see both the liabilities from the submissions and the payments on employer accounts.  Rebecca Benneyworth warned that it might be as long as two years before agent access to the client tax dashboard is up and running, so in the interim many agents may feel they have no other option but use their clients’ log-in details in order to overcome the RTI ‘information gap’.

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