A FREE resource from the UK accountancy profession

PAYE Real Time Information, Universal Credit & your business Read More

Report Issues


RTI ‘not working’ says tax adviser

July 22, 2013


Kate Upcraft, a member of HMRC’s now disbanded RTI Customer User Group, has told the Daily Telegraph “much of RTI is not working”.

Ms Upcraft is a widely published expert on payroll matters, contributing articles to publications such as Tolleys’ Practical Tax and Bloomsbury’s Payroll Management Handbook and a member of the Chartered Institute of Payroll Professionals.

Ms Upcraft says she is concerned about how HMRC’s systems will cope with the inclusion of a further 16,000 large employer schemes from October which have yet to begin reporting PAYE information in real time.  Her concern is that HMRC’s systems are ‘corrupting employer data’ received from RTI submissions.  This corruption, she says, causes the creation of duplicate employer files which results in demands from HMRC for overstated amounts of PAYE, and it is happening on a ‘massive scale’.  Upcraft says that ‘two of [her] clients have been asked for sums around £1m for one tax month that is not due.’

Ms Upcraft has also commented on this issue on’s own feedback pages relating to HMRC RTI Systems.  In her post she revealed that her clients are being harassed for money HMRC incorrectly thinks they owe ‘despite asking HMRC to stop chasing for [these] “underpayments” until they can correct their accounting systems’.  She went on to say that:

‘some smaller employers have been so scared they have simply paid up even though they are certain the money isn’t owed, those who are larger or have an agent in place have asked HMRC to prove where the figures have come from which of course they are unable to do, so there is stalemate.’

The time and cost of dealing with the systemic problems of RTI are also areas of concern for Ms Upcraft.  She has regularly experienced 45 minute wait times during calls to HMRC when dealing with her clients’ problems.  One of Ms Upcraft’s clients has resorted to employing someone just to monitor RTI for the firm every week, ‘as so much of RTI isn’t working’, at a cost of £25,000 a year.

As has reported previously, awareness of the problems surrounding HMRC handling of employer submission data both among the accountancy profession and payroll professionals has been severely limited by the ‘RTI Information Gap.’  The Information Gap arises where neither side has access to the employer Payments and Liabilities viewer or the Business Tax Dashboard, on HMRC’s systems, because the agent’s permissions are restricted and the employer is relying on the agent to manage all aspects of PAYE for them and so has not signed up for access to the information.

The problem of PAYE liabilities not matching what was submitted under RTI in employers’ FPS and EPS report submissions, is only identified after the event and not as they arise, in real time. The problems only come to light when, as Ms Upcraft’s clients experienced, HMRC makes contact with the employer to demand payment of PAYE which is not in fact due.

Ms Upcraft participated fully over a period of 18 months in meetings of HMRC’s RTI Customer User Group, a body set up by HMRC, comprising leading employment tax and payroll professionals, to give HMRC guidance on the implementation of RTI and to highlight problems which had been experienced by ‘customers’. She identified the struggle for better guidance as the key problem the CUG had faced when dealing with HMRC in a posting on her website (blog entry of the 19 July).

HMRC has disbanded the Customer User Group despite the fact that many issues about RTI were raised by the group and the fact that RTI is not yet fully live.  HMRC has, Upcraft says, ignored many of the issues brought to its attention by the CUG, and she is ‘staggered’ that HMRC are pressing on with the expansion of RTI to the largest UK PAYE schemes while there are unresolved issues with the system.

In her blog, Ms Upcraft says that HMRC only made details of ‘known errors’ available to the public because of ‘pressure from the CUG […]  Before publication much time was wasted by employers and HMRC staff making/receiving calls about issues that had already been identified such as incorrect NINO notices.’  Ms Upcraft also felt that HMRC had not actually told the CUG about many issues – she said that she had ‘learned more from the NAO report than [she had] from CUG meetings in respect of ongoing issues.’

One such ongoing issue highlighted by the NAO report is the creation of incorrect tax codes by HMRC’s systems.  In her comment on’s feedback page, Upcraft said:

the scale of [the tax code problem] is still unknown but based on the experience of my own clients (and my own record which has been corrupted) it is an area HMRC ought to be very concerned about. Sadly tax codes are not visible to most employers as they are uploaded automatically into payroll systems and individual taxpayers have so little knowledge of the complexities of the tax system that they blithely accept that any code that HMRC tell them has been allocated is correct, so there are no checks or balances on this aspect of the project.

The Telegraph article reported one client of Ms Upcraft’s received 99 new tax codes, all of which were incorrect. 

HMRC has blamed payroll software glitches for the creation of duplicate records leading to incorrect demands for outstanding PAYE.  A software developer quoted in the Telegraph article said that this was ‘unfair’.  HMRC worked very closely with software developers when designing RTI, and according to the spokesman interviewed, HMRC ‘refashioned the whole of the payroll industry.’  He went on to say: ‘It cost us a fortune.  They defined what they were going to do before they talked to us.’  Ms Upcraft said that ‘It is sad that HMRC have gone into print with a comment that the payroll software industry is at fault when they have done such sterling efforts to make RTI a success against all the odds.’

She said if it is the case that issues with [commercial] software are to blame for problems, HMRC should ‘tell us what [the issues] are so the industry can address them'.

< Back to news

comments powered by Disqus