Advanced Business Solutions » hmrc

HMRC PAYE review is radical for the industry

Kate Upcraft — Wed, 04 Aug 2010 08:19:37 +0000

What do you think of the PAYE review published yesterday? It’s pretty radical stuff to feed all employee data to HMRC each pay period from April 2012 and from 2015 move to HMRC calculating tax and NICs. It should be a huge opportunity for the profession to move away from being seen as purely transactional and at last have the time to act as reward professionals providing advice to their organisations on tax efficient remuneration, managing the salary bill and utilising the mass of employee data that we ‘own’. I imagine it will certainly shake up the software market as one wonders whether legacy systems will cope with this proposal as well as the 2012 pension reforms. I’d also be interested to discover what the bureaux think of the centralised deduction proposals and the impact on their offer

Kate Upcraft
Payroll writer and lecturer
ISIS Support Services Ltd
kateupcraft@btconnect.com

HMRC PAYE review is radical for the industry is a post from Advanced Business Solutions - Supplier of accounting software, business intelligence and document managment

Revenue outlines service reduction for share support – is this the thin end of the wedge?

Kate Upcraft — Wed, 28 Jul 2010 09:43:14 +0000

HMRC’s Share Schemes Services Unit have written to their customers outlining the reduced level of support that they can expect as the annual share returns are about to be submitted – to the same deadline as P11Ds. They say:

They prefer email as they cannot guarantee being able to answer the phone
Copies of scheme rules must be sent with queries as HMRC has virtually nothing on file
They have only three inspectors reviewing share scheme documents, compared with ten only a matter of years ago
Correspondence is taking up to six weeks to turn around

They see one of the solutions to these problems, which are not going to abate, being the potential for scheme rules no longer to be approved by HMRC with employers simply taking professional advice.

One wonders what other radical service initiatives will begin to bite on employers as part of the huge reduction in departmental budgets. The decision to close 130 tax offices in March and the impact on access to tax enquiry centres has already caused consternation amongst civil service unions and taxpayers.

Kate Upcraft
Payroll writer and lecturer
ISIS Support Services Ltd
kateupcraft@btconnect.com

Revenue outlines service reduction for share support – is this the thin end of the wedge? is a post from Advanced Business Solutions - Supplier of accounting software, business intelligence and document managment

HMRC manages expectations on service

Kate Upcraft — Tue, 27 Jul 2010 11:32:31 +0000

In its latest newsletter to stakeholders, HMRC’s David Ellis is very clear about the current service standards that employers can expect from the department, and one would suspect that with more budget cuts to come, this will become business as usual.

He says that the position is:

Repayments and forms – broadly five days old;
Pensions and benefits – we are keeping these under 40 days old and hence the oldest items are dated in May;
Customer letters (the catch all after the other two categories are removed) – this post is older but we are recovering ground on this quickly following the redeployment of resources to manage the notice of coding activity earlier this year – around 7% is over three months old.

HMRC has also turned off the ECS interface again which captures data from P46(car) forms and P11Ds, so employers need to make employees aware that if they want to see a prompt code amendment after submission of either form type, they will need to contact HMRC directly. No date for ECS to resume has been given at present.

HMRC manages expectations on service is a post from Advanced Business Solutions - Supplier of accounting software, business intelligence and document managment

Cable proposes a graduate tax

Kate Upcraft — Mon, 26 Jul 2010 09:51:44 +0000

One year on from the debacle of the Student Loans Company’s (SLC) handling of loans to last year’s intake of graduates, Business Minister Vince Cable has put forward a novel way to solve the problem and at the same time cut more public sector jobs – scrap the SLC and introduce a graduate tax instead.

Cable proposes that the government pay universities directly for tuition fees and then recoup the money through the imposition of a higher rate of tax for ex-students. Cable said he has asked former BP boss Lord Browne, who is leading a review into student funding, to look into proposals for a graduate tax. The review is due to report to Government in the autumn.

Employers would therefore be managing the run-off of student loan deductions for those still repaying them, plus identifying a new group of ex-students to apply a different rate of tax to, or more than one rate. As one could argue that graduates should end up in higher paid jobs one assumes that they will be paying a premium on top of the higher (or even additional rate of tax). With the SLC consigned to history, who would monitor when the fees had been repaid to instruct employers to cease the student rate of tax?

The SLC has had enough problems predicting the repayment end dates for loans and to this end recently started to take loans on to direct debit for the last 23 months of the predicted repayment period. With earnings fluctuating as they do and the multiple job scenario one wonders how such a system could be responsive enough? But perhaps I detect some joined up thinking here, is that why the PAYE review announced in the Budget talked of more ‘real time PAYE date’? If we were submitting earnings information on a monthly rather than annual basis this would allow HMRC to respond to the student’s repayments – that’s assuming that HMRC have any people left to mage their IT systems once the spending review is announced in October!

Kate Upcraft
Payroll writer and lecturer
ISIS Support Services Ltd
kateupcraft@btconnect.com

Cable proposes a graduate tax is a post from Advanced Business Solutions - Supplier of accounting software, business intelligence and document managment

HMRC lets employees down on car tax codes

Kate Upcraft — Fri, 09 Jul 2010 10:13:55 +0000

In his latest letter to stakeholders, HMRC’s David Ellis has admitted that P46(car) forms were not processed from April of this year due to the ongoing problems with the National Insurance & PAYE Service system (NPS) and the need to correct annual codes. A number of taxpayers had queried with HMRC why their code had not been amended once their employer had informed HMRC that they had been given, or had a car removed, since the start of this tax year.

HMRC have now confirmed that the backlog of forms has been cleared and new codes should be forthcoming. Remember that changes of car cannot be reported on P46(car) for this tax year, the taxpayer must make contact directly with HMRC to report a change of car and initiate any code review. Changes of car will not be reported by employers until P11Ds are submitted in July 2011. The validation will be changed back for the 2011/12 tax year so that employers can once again report new, removed and changed cars.

Kate Upcraft
Payroll writer and lecturer
ISIS Support Services Ltd
kateupcraft@btconnect.com

HMRC lets employees down on car tax codes is a post from Advanced Business Solutions - Supplier of accounting software, business intelligence and document managment

HMRC top the hospitality stakes

Kate Upcraft — Sat, 26 Jun 2010 10:28:37 +0000

Do you know what makes me sad about the revelation that Dave Hartnett – permanent secretary for tax at HMRC – is the civil servant who holds the record for being treated to corporate hospitality over the last year (107 times we are told)? It’s not that he had the time to go out twice a week as well as help run HMRC, but that I’ve never been to an employer event that he has also been at to hear at first hand the concerns of the payroll profession who act as his army of unpaid tax collectors.

There is an impressive list in the Daily Telegraph of all the city firms whose hospitality he has enjoyed and of course they contribute lots of corporation tax and want to bend his ear on their concerns, but the payroll profession would also like the same opportunity – trouble is we only have conferences and user groups to invite him too and perhaps they don’t have the same cachet.

Perhaps next year his attendance at the IPP conference will be on the list revealed by the Government, albeit he might have to pay for himself!

Kate Upcraft
Payroll writer and lecturer
ISIS Support Services Ltd
kateupcraft@btconnect.com

HMRC top the hospitality stakes is a post from Advanced Business Solutions - Supplier of accounting software, business intelligence and document managment

End of year late filing concession scrapped

Kate Upcraft — Wed, 23 Jun 2010 15:41:22 +0000

HMRC has announced that for payroll year end P35 and P14 returns for 2010/11 it will charge a penalty if these are not received by 19^th May. Since 1995, HMRC has operated extra statutory concession B46 that allows for a further seven days after 19^th May before penalties for late filing are charged. The concession was designed to allow for postal delays, but as the vast majority of employers must now file online it is no longer necessary.

It had been expected that HMRC would take this approach but I know from my days as a payroll manger that those extra seven days were very welcome if it all went pear-shaped, and are often vital for payroll bureaux who struggle to get some clients to provide the payroll data that they need. Will it change your year-end timetable?

P.S. Of course the additional penalties for those who can’t get ready for 19^th will help the Treasury coffers, won’t they ?!

Kate Upcraft

Payroll writer and lecturer

ISIS Support Services Ltd

kateupcraft@btconnect.com

End of year late filing concession scrapped is a post from Advanced Business Solutions - Supplier of accounting software, business intelligence and document managment

Why are HMRC obsessed with works numbers?

Kate Upcraft — Wed, 23 Jun 2010 10:26:55 +0000

We now know that one of the key factors in the debacle around tax codes at the start of the tax year was the design of the new National Insurance and PAYE System (NPS) and its over-reliance on works numbers. Every time the system spots a variation in a works number it erroneously assumes that the person has a second job with the same employer – hence the proliferation of BR tax codes. It’s obviously not going to be a quick fix to turn off this logic as one HM Revenue & Customs’ (HMRC) latest circulars to employer groups, from David Ellis Head of the Business Engagement Team, carries this most peculiar plea to avoid employers causing tax code inaccuracies:

‘It is important that the same works number on the P14 is also shown on the P46/P45(3), as different numbers can cause a data mismatch for HMRC resulting in duplication of records. The effect for employers is unnecessary correspondence from HMRC, increased administrative burden and unmatched employer data against HMRC systems.‘

Excuse me but why do HMRC expect works numbers to be static? For many employers the works number contains digits that refer to an internal cost centre, hence when an employee moves jobs internally their number changes, so of course it won’t be the same as the number when they were recruited years previously – in some businesses it may change almost annually as a result of restructuring and career moves. If only HMRC had asked the employer representative bodies if using works numbers as a match was a good idea before designing a system around them perhaps some of the current issues for taxpayers and the admin burden for employers of wrong tax codes could have been avoided. HMRC’s good work in consulting with employers gets undone when fundamental decisions such as this bypass the forums they have set up to scrutinise them.

Kate Upcraft
Payroll writer and lecturer
ISIS Support Services Ltd
kateupcraft@btconnect.com

Why are HMRC obsessed with works numbers? is a post from Advanced Business Solutions - Supplier of accounting software, business intelligence and document managment

When will HMRC treat employers as customers?

Kate Upcraft — Sat, 19 Jun 2010 15:38:29 +0000

Yet again we see HM Revenue & Customs (HMRC) reacting to criticism of its contact centres by providing help for the agent community with the introduction of a priority line for SA queries – for those of you lucky enough to be an agent the priority line number is 0845 366 7855. Sadly, despite plenty of lobbying over the years (I should know I was one of those doing the lobbying at the IPP!), the message that employers act as the agents for millions of unrepresented taxpayers, also known as employees, just doesn’t seem to be getting through to HMRC.

It’s okay for employers to field all the issues that emanated from the debacle around tax codes at the start of this tax year but when it comes to getting help from HMRC, often to solve a problem they have created, then we seem to be bottom of the food chain. Given our role in bringing in billions of revenue into the Treasury, a level playing field in terms of service is long overdue.

Kate Upcraft
Payroll writer and lecturer
ISIS Support Services Ltd
kateupcraft@btconnect.com

When will HMRC treat employers as customers? is a post from Advanced Business Solutions - Supplier of accounting software, business intelligence and document managment

Negligence v official error

Kate Upcraft — Thu, 17 Jun 2010 15:37:08 +0000

Does anyone out there feel its time that the balance got redressed a little when government departments make a mistake? We heard last week that HMRC had ‘inadvertently’ sent out tax credit notices with other claimants’ personal details attached as the pages had been collated in the wrong order. This follows hot on the heels of the debacle at the start of the tax year when thousands of tax codes were issued incorrectly, causing significant hardship to employees where they found themselves on BR codes and often needing a salary advance from their employer to tide them over.

When a government department makes mistakes, and we all do because we are human, it is simply an error and we have to cope with the fallout, however significant to our privacy or finances. When we make a mistake it is negligence and we face an automated fine that we have to appeal – of course these too are often sent out incorrectly. Should government departments make it easier for us to get financial redress for official error – isn’t that part of the reason for an HMRC taxpayer charter?

Negligence v official error is a post from Advanced Business Solutions - Supplier of accounting software, business intelligence and document managment