RTI: HMRC about to send out reminders.

It seems that there are a considerable number of small businesses that HMRC expected to come into RTI from April who have, so far, failed to file their first FPS and HMRC are preparing to contact them. The number of businesses falling into this category will be confirmed before the end of June.

Apparently 1.3 million employers have joined the scheme, but 1.9 million are thought to be eligible.

The implications of Auto Enrolment for disabled people

Many people with a disability become reluctant employers, using Direct Payments/ILF, because this is the only way to ensure that they receive the quality of care support and the control of their lives that they desire. The alternative of using Agency staff is not viable for many of this group of people, being variable at best and awful at worst. Under the Agency system, the person needing support can never be sure who will turn up at any given time, how well trained they are and often has not even met the person before.

As already said, these people only choose to become employers as the lesser of two evils and many find the burdens of being an employer overwhelming at times. Just this year, there has been the additional requirements of RTI to be dealt with.

How will this group of employers deal with yet another burden, when the staging dates approach for Auto Enrolment? I suspect that it may be the straw that breaks the camel’s back for some, deterring them from continuing as employers and forcing them to rely on Agency care support in the future.

What do you think?

HMRC issuing incorrect Tax Codes

As a result of the first RTI returns, HMRC have issued a number of incorrect Tax Codes to employers. If an employee was not included on the Employment Alignment Submission or the first Full Payment Submission, then HMRC have treated them as a leaver and, subsequently, a new starter. The following is the advice given by HMRC:

Real Time Information: submissions creating new employments and tax codes

Where an employer:

  • has submitted only part of their employee payroll on their Employer Alignment Submission (EAS) and subsequently includes the remainder of their employees on a subsequent Full Payment Submission (FPS), or
  • submits their EAS in parts, but does not indicate on the first EAS that they will be submitting in parts, HMRC treats the first part as the full alignment submission, or
  • an employer uses their first FPS to align (rather than an EAS) and does not include all employments on that first FPS

once alignment is complete, any live employments not included by the employer will be ceased with a date of leaving of 5 April 2013.

We have investigated this issue and identified that in all the examples we have seen, when the employer sends a subsequent FPS, HM Revenue & Customs (HMRC) will create a new employment. That new employment record will not contain any benefits from the individual employee’s tax code. Therefore, the tax code that is issued for the new employment will be incorrect.

Employers should not operate the incorrect codes. They should continue to use the previous code.

If an employer or an employee receives a tax code where the benefits have been removed, they should get in touch with HMRC’s Taxes Helpline on 0845 300 0627 to get the benefits added back in and the code corrected.

Employers should ensure that they send HMRC details of all employees on their payroll, or, if they are sending their EAS in parts, indicate how many parts they will be sending.

Make what you will of that! How is the employer/agent to know which is the correct code to use? Hopefully, this will sort itself out but may take some time and effort.

Tax credit claimants warned over scam emails

As the renewal deadline for Tax Credits approaches and the Inland Revenue begin an advertising campaign to remind claimants to renew their claims, HMRC are warning everyone to beware of fake and scam emails. These emails try to spoof the official HMRC website and are seeking to get your personal and bank details with a view to stealing your money or your identity.

Nick Lodge, Director General of Benefits and Credits, said:

“HMRC will never ask you to disclose personal or payment information by email. We are committed to your online security but the methods fraudsters use to obtain information are constantly changing, so you need to be alert. Anyone who receives this type of email should send it to phishing@hmrc.gsi.gov.uk.”

HMRC sending out some NI Numbers without the final letter

HMRC have sent out some National Insurance in response to requests without the final letter (A,B,C or D). Below is there latest update on the situation with advice on what to do.

“PAYE for employers: National Insurance numbers without suffixes

In response to some National Insurance number Verification Requests (NVRs) and Full Payment Submissions (FPS) with missing or incorrect National Insurance numbers, HM Revenue & Customs has issued a number of National Insurance numbers without the final letter (A, B, C or D) of the number.

The issue of National Insurance numbers is currently on hold whilst we investigate this.

We have identified three scenarios and what actions employers should take.

Scenario 1 – the incorrect National Insurance number was included on an FPS and the correct number goes back with no suffix

You should use the National Insurance number that was sent back and use the suffix that was on the original submission – A, B, C or D. If you do not know what this was, you should enter the space bar. Please do not guess which letter (A, B, C or D) should be used.

Scenario 2 – no National Insurance number was provided on the FPS and the correct number goes back with no suffix

You should use the National Insurance number that was sent back, but enter the space bar instead of the suffix. It is important to enter the space bar, rather than trying to truncate the number to eight characters. Please do not guess which letter (A, B, C or D) should be used.

Scenario 3 – employer sends NVR and the National Insurance number supplied by HMRC is without a suffix

You should use the National Insurance number that was sent back but enter the space bar instead of the suffix. Use the space bar rather than trying to truncate the number to eight characters. Please do not guess which letter (A, B, C or D) should be used.

Please note that using a National Insurance number without a suffix (A, B, C or D) should be the exception, in these scenarios only.

We apologise for any inconvenience whilst we investigate this issue. We will publish an update on these pages.”

RTI working!

HMRC are reporting over 1 million successful Full Payment Submissions (FPS) in the first month of RTI and, in spite of a few glitches, mainly due to some employers leaving everything to the last minute, the changeover seems to have gone remarkably smoothly.

I have to admit to some trepidation when it came to putting through my first couple of FPS’s and a great deal of relief when they were accepted but it appears that the system is going to be a lot quicker in the long run and a lot more efficient.

So I guess we must say “Congratulations” to HMRC for a well-planned launch and to the software writers who have worked with them to create efficient payroll software.

HMRC’s software failing to file RTI returns!!

Payroll World have reported that HMRC’s own Basic PAYE Tools software, used by some small employers with less than 9 employees to work out their payroll and take care of online filing, is failing to file RTI submissions in some cases. Advice from the Revenue on how to resolve this issue can be found here.

Another good case for using a professional Payroll Bureau?

Important May Dates

Just a quick reminder of a couple of important dates coming up this month:

  1. 19th May – 2012/13 PAYE year end returns (P14, P35, etc) should be filed online by this date. (Unless you were on the RTI Pilot.)
  2. 31st May – 2012/13 P60s should have been given to employees by today, if they haven’t already.

Year End Returns to HMRC

Don’t forget that, even though you might be reporting payroll in real time (RTI) now, you still have to file a Year End Return with HMRC for the year 2012-13 by 19th May, unless you were on the RTI pilot scheme. If you have not had to maintain any P11’s during the year and therefore don’t need to make a return, you must inform HMRC of this by the same date, otherwise you may receive a late filing penalty if they are expecting a return.