Thu, 24 Nov 2011

Concerns over HMRC policy to collect staff hours worked for RTI

Questions have been raised over why certain data items will need to be collected for Real-Time Information (RTI) that are not related to individuals’ taxable income.

HM Revenue & Customs (HMRC) wants payroll departments to collect hours worked by employees for RTI and log them in three categories: up to 16 hours (15.99 and less); 16 to 29.99 hours; 30 hours and above; and other.

But concerns have been raised that the collection of such data is forcing payroll departments to take on extra work, so the Department for Work and Pensions (DWP) can assess benefit claims under the Universal Credit system.

Matt Boyle of the Research 4 PAYE group said: “HMRC is concerned about the correct amount of income tax being paid on an individual’s taxable income. Receiving any hours-related benefits is a personal responsibility, and not one that big brother needs to be involved in.

“What next? Should employers report individuals who don’t use a wheelchair at work, just in case they are claiming disability benefit?”

Karen Thompson, associate director of policy, research and strategic vision at the Chartered Institute of Payroll Professionals, says that one of the main issues is whether actual hours worked, or contractual hours, will be recorded.

“If actual, and it is a positive payroll, there is no issue as payroll needs hours recorded for pay. But if it is a negative payroll, with a stored salary that does not change without intervention, the hours stored are normally only used for pro rata calculations,” she said.

“The hours worked are related to taxable income as this reflects pay, however HMRC knowing the actual hours does not, but will be used to determine tax credit payments and Universal Credit payments.”

A spokesman for HMRC said: “We will not be asking for specific hours worked, but will be asking for employers to put their employees into bands of hours worked. This will enable us to improve the accuracy of tax credit awards.”

See also:

• Mrs Dummy? HMRC puts onus on employers to clean up data ahead of RTI
• U-turn on P45: leaver statement reform scrapped for RTI launch
• Specsavers joins RTI pilot next week: ‘we don’t foresee any problems’