Payroll adviser Kate Upcraft of Leicestershire based ISIS Support Services, fears the Real Time Information system will be unable to cope with the flood of data when Britain’s 16,000 biggest private companies make the switch.
Some small businesses have struggled to adapt to a system that involves them providing payroll data to the taxman on a regular rather than annual basis. HMRC has agreed to give them more time to adapt before imposing penalties, reports The Telegraph.
The PAYE reform has a crucial role in the Government’s welfare reforms, providing the data needed for the Universal Credit System.
Ms Upcraft says she is staggered the Treasury has allowed HMRC to push ahead with plans to bring the biggest employers into the RTI set-up in the autumn while problems remained.
She claims HMRC are overstating tax receipts on a “massive scale as they are corrupting employer data.” She added: “Two of my clients have been asked for sums around £1m for one tax month that is not due.”
Another has been forced to give one employee the task of monitoring RTI each week “as so much of RTI isn’t working”. Last week the firm received 99 tax codes from HMRC that “were all incorrect”.
Ms Upcraft said the user group had raised concerns about a wide range of issues over an 18-month period in meetings with HMRC but many of these had been ignored.
The National Audit Office has highlighted shortcomings in the introduction of RTI but an HMRC report on the introduction of a pilot project published last week said the process worked well and had provided evidence that it would reduce administrative burdens for employers.
Payroll software “glitches” were blamed by HMRC for problems involving duplication of records. One software expert involved in discussions with HMRC said the criticism was unfair.
He added: “In order to get the information they wanted they refashioned the whole of the payroll industry. It cost us a fortune. They defined what they were going to do before they talked to us.
Ms Upcraft said employers were frustrated by the time it was taking to settle complaints.
“My own experience has been 45-minute waits regularly and then a very kind operator being unable to explain why they had terminated every employee on one of my payrolls.”
