RTI research findings 2016

Recent research about the challenges faced by micro-employers who manage PAYE in real time offers HMRC various options to improve the system and reduce the number of non-compliant returns.

Based on 45 interviews, researchers found that there is still confusion about RTI despite the system having been in operation for three years and information readily available on HMRC’s website. However, navigating the website is not easy and many small employers either tend to ignore it or find they do not have sufficient time to find their way around the website.

Industry experts have suggested that HMRC should acknowledge that non-compliance is as much their responsibility because their communications are often inept. Focused guidance should be available and the best time for this would be when a PAYE scheme is first registered. If telephone advisers were more accessible and had up-to-date and comprehensive knowledge of RTI many potential problems could be dealt with before they developed and there would be fewer instances of non-compliance.

The researchers criticised RTI penalty letters because no explanation is given about why HMRC considers that a failure has occurred. The number of errors which are still waiting resolution from the inception of RTI in April 2013 has been a drain on HMRC’s resources and caused difficulties for employers and their agents. However, with new PAYE sanctions not due until April 2018 at the earliest there is an opportunity for communications sent to employers to be redesigned.

Stabilising RTI is important so that Making Tax Digital (MTD) can be implemented and it is hoped that HMRC take on board the suggestions coming from the research.

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Reference: http://www.accountingweb.co.uk/tax/hmrc-policy/hmrc-should-stabilise-rti-before-mtd