HMRC attacks employers over RTI

Tax

HMRC’s latest report on RTI blames most errors on employers. But beyond these accusations is a serious message – get it right or be fined. What’s the trouble?

RTI review. Between July and the end of September HMRC carried out a review of discrepancies between the amount of PAYE tax and NI employers thought was payable, compared to the amount HMRC had on its books. While it concluded its IT system worked out the so-called “RTI charge” correctly, it concedes this information didn’t show up on its online records for some time. Therefore, employers looking at this would assume something was wrong which, in turn, caused further problems.

Putting it right. However, HMRC’s recent statement makes light of its shortcomings while emphasising errors made by employers. This seems unfair given the massive change RTI represented for employers, especially small businesses. However, putting aside the irritating aspect of its report, HMRC provides some helpful pointers to help you identify and correct common mistakes. For example: where an employee leaves but you don’t pay their final wages until later, you shouldn’t use the “payment after leaving” indicator unless you have already sent a full payment submission showing their date of leaving where an employee started working for you during the current tax year, don’t include their pay and tax from their P45 for the previous job in the “year-to-date” figures.

More advice. HMRC’s report points at other errors made by employers, and has promised detailed and updated guidance on how to avoid and correct these. We’ll let you know as soon as it’s available.

Other agenda. In a separate statement, HMRC warns that in-year penalties for RTI errors will start from April next year; putting two and two together it seems the message is: get RTI right or expect to be fined. Check for discrepancies between your RTI payments and HMRC’s records. Find out why these occurred and ensure that from the start of the next tax year they aren’t repeated.