Mon, 1 Aug 2011

PAYE data sparks criticism among experts

The exclusive use of BACS and VocaLink solutions to transmit PAYE information following the implementation of Real-Time Information (RTI) has been criticised by industry experts.

Research for PAYE campaigner Matt Boyle questioned HM Revenue & Custom’s rationale for withdrawing the Electronic Data Interchange (EDI) channel, which is currently used but will be replaced by BACS in 2014. He was told in a letter of response from Margaret Hodge MP, chair of the Public Accounts Committee, that she had asked the National Audit Office to ‘look into the points raised in your email, in particular the department’s rationale for withdrawing EDI.’

The letter assured him EDI would be accepted until 2014. She said: ‘While HMRC considers BACS to be the strategic solution to RTI, it announced on 13 May that it will accept RTI data through EDI until at least April 2014.’

Simon Parsons, chair of IReeN, the user group for electronic exchange between employers and HMRC, said the EDI system works well: ‘This [the move to EDI] is rubbish. EDI allows you to submit information on the same day as the pay run, but under the BACS system RTI data is integrated with bank credits, so you have to wait. EDI is not slower; it is potentially faster.’

Boyle’s concerns over the use of the preferred supplier (BACS) also raised questions about the tendering process. A spokesman from HMRC said: ‘BACS remains HMRC’s strategic choice. We will publish more information about the revised timetable for BACS later in the year.’

Talking of the tendering process, he would only say: ‘The new system will be developed under existing contractual arrangements.’

VocaLink, however, claims to be the only company that can deliver on the real-time element. Peter Seymour, head of government and public service at VocaLink, said: ‘How can it be put out to tender? The UK has only one payments clearing house and VocaLink runs the BACS infrastructure. Nobody else can submit credits of this nature.’