A leaked copy of an HMRC email reported in the Daily Telegraph has led for calls for a review of the Revenue’s flagship Real Time Information (RTI) system after error-riddled liabilities summaries were distributed to thousands of employees.
The new system requires all employers, including Umbrella Companies with their professional contracting employees, to submit pay and tax calculations every time a payment is made to an employee; however, the system has been beset by difficulties. In the light of this latest debacle, the Association of Taxation Technicians (ATT) has called for the involvement of independent tax experts in a review of RTI.
ATT president Natalie Miller described the latest revelation as “alarming”, adding that it underscored the need for external stakeholders to be involved in a review.
The ATT, Ms Miller said, had been alerting HMRC to the “quirks and complexities” of RTI from the outset. It had also drawn attention to the “significant burdens” the system had placed on employers and agents. The serious error now affecting thousands of employees might have been avoided if advice from the ATT and other bodies had been heeded by the Revenue at an early stage, she added.
Warning that the pattern of stumbling from problem to problem was undermining RTI’s credibility, Ms Miller said: “What we need is a thorough investigation of what has happened by a team which includes not just HMRC personnel but external specialists. Only that will give the necessary degree of confidence in the system that is vital for everyone who depends upon it (employees, pensioners, employers, payroll bureaux, tax advisers, other parts of government and HMRC itself).”