'Real time' PAYE pilot goes live at HMRC
10 employers volunteer to take part in the trial
HMRC has launched a pilot of Real Time Information (RTI) for PAYE.
Under RTI, employers and pension providers will notify HMRC about PAYE payments at the time they are made, rather than solely at the end of the year. RTI will eventually support the operation of universal credit, the government's welfare programme that brings together means-tested in and out of work benefits, tax credits and support for housing.
The tax authority is taking part in the trial, one of 10 employers to do so.
Stephen Banyard, acting director general for personal tax, said: "The pilot will allow us to iron out any wrinkles in a small, controlled environment so that we can ensure RTI is working smoothly as more and more employers join the pilot.
"We are working closely with employers and the payroll industry but having HMRC take part in the pilot will allow us to see first-hand how it is working from an employer's perspective."
A specialist team of RTI experts will be on hand to support employers through the pilot, which launched this week, according to HMRC.
A further 310 volunteer employers and pension providers will join the pilot during May and June, the tax authority said. Depending on its success, up to 1,300 additional employers will begin using RTI by September.
It is anticipated that most employers will join RTI from April 2013, and that all employers will be using the service by October 2013.
Last month Mark Holden, the RTI programme director at HMRC, told Guardian Government Computing that the big challenges for RTI were more likely to be around implementation, rather than the technology underpinning the programme.
This article was originally published at Guardian Government Computing.
Guardian Government Computing is a business division of Guardian Professional, and covers the latest news and analysis of public sector technology. For updates on public sector IT, join the Government Computing Network here.
Re: I Hate PAYE
I'm a mathematician - I have a degree in it. I was self-employed for many years. Not once was I 100% sure that I'd filled in the tax return properly, when it was still using the paper returns.
Did I have masses of complicated tax law to contend with? No. I was paid X amount of money by clients and had ZERO expenses. I kept records and receipts for everything I was paid. I had no pensions, capital gains, bank interest on savings or anything else to worry about - just income. I could have claimed the occasional £2 on a bus fare or something ludicrous but the effort was just not worth it at all, so 99% of my tax return was little boxes marked "0".
The online system actually worked better, but still I couldn't say for sure that I was actually 100% confident that I'd typed in everything correctly and in the right boxes. I was confident I'd pass audit, should it ever happen, because my records were SO simple I could keep years-worth of them in one folder and not claiming any expenses meant that, actually, if anything, I forfeit some rebate for the sake of simplicity - erring on the side of caution. And all of my bank statements and the records of my client would tally perfectly.
When I did check with people who do tax all day, every day, they wanted me to make things ten times more complicated so that I could earn a pittance back in rebates. But they said that, if I didn't want that, then my returns were exactly what they'd have filed. So I didn't do anything "incorrectly", but it *NEVER* was clear that it was correct, at any stage, to a mathematician who could spend DAYS filing the simplest of returns with the simplest of incomes and records.
And one year, they made me pay several thousand pounds (that I didn't have) in tax in advance because "our projections show you'll earn that much next year". They'd refund it later, of course, because their projections were wrong and mine were right, but even so, I had to find several thousand pounds out of thin air, hand it to them for a year - interest-free - under threat of imprisonment, and then only get it back when they were proved wrong and they felt like filling out the paperwork. Their projections were out because the bottom fell out of the market, and I knew that, and had planned for that - so at the worst possible time they demanded lots of money that I didn't have. I had to take out a loan to cover it (and not go to prison), and then pay back MORE every month until my rebate came a year later.
The hassle of a tax return just isn't worth it. Even under an umbrella company, it's worth the commission just to have them sort out that junk for you.
Re: Please get this right
As someone who's had to do a number of PAYE refund requests I know the system quite well.
First, check http://www.hmrc.gov.uk/calcs/stc.htm to see if you are due a refund.
If you are still in employment with the same employer, when you get your P60 with the overpayment on it, ring 01355 359 022 and ask them to arrange a refund. If they give you the run around, request a form R38, then use that, with a covering letter and a print out of the tax checker calculation summary page linked above.
If you are no longer in employment with the same employer, just use form P50 from http://www.hmrc.gov.uk/pdfs/p50.pdf and send it to HM Revenue & Customs, Pay As You Earn, PO Box 1970, LIVERPOOL, L75 1WX.
If you don't agree with their decision, follow http://www.hmrc.gov.uk/factsheets/hmrc1.pdf *within 30 days*.
Coincidentally, I've also got a degree in maths, I'm self-employed and I don't claim my trivial expenses. And filling in a tax return really isn't hard. If your affairs are simple then there are about six boxes you have to put numbers into. What's the problem?
If HMRC ask for a payment on account for money you won't be earning, just tell them and they'll cancel it. If you do earn the money anyway they'll charge you interest. If you don't, there's no problem. I did this last year. You don't have to rustle up thousands of pounds from nowhere.