RTI consultation – The result is a rubber stamp

Matt Boyle, campaigner at Research for PAYE

Well HMRC has now published its summary of responses to Improving the operation of Pay As You Earn (PAYE): Collecting Real Time Information.

The introduction of Real Time Information (RTI) is a major change to the business processes surrounding payroll as operated by some 1.1 million employers and it is interesting to note that this document runs to 15 pages, four of which detail the names of those that contributed to the consultation and two of which consist of the title and the Index.

The findings are unsurprising to many in that they would appear to support the original proposals of HMRC, but one has to question if such a small survey really does reflect the views of those involved in the operation of payroll.

One surprising comment in the document is that “The majority of employers told us that they are unable to record the number of hours worked during a pay period with any degree of accuracy.” Unfortunately we are not told who these “majority” are or given any statistics to support this view. This would seem to imply that the vast majority of employees are not paid on an hourly rate and that payroll is not effective in computing gross pay based on a knowledge of hours worked. This information is based on 187 formal responses some of which came from organisations not actually involved in payroll processing on a day-to-day basis.

Many issues

This “finding” appears to means that employers will now have to make a report of “Hours worked will be reported in bands of normal weekly hours worked broadly reflecting the current Tax Credit legislation. These bands will be: up to 15.99 hours, 16-29.99 hours, 30 hours or more, or ‘other’, which will be used when these categories do not apply, e.g. for pension payments.” This means additional information that employers will have to factor into their business processes for RTI operation.

We are told that “Analysis shows over 90% of employees are paid through a Bacs channel” but again we do not know if this is 90% of 10 or 90% of the 30+ million employees in the UK.

There are many other issues that need to be properly reviewed, which will be discussed at a later date, but it would seem that we are stuck with this simple “rubber stamp”.

Is it acceptable that such a major change to the operation of payroll for so many employers and payroll teams is apparently given such a poor analysis on the effects of the proposed implementation?

 

 

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