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Timing of HMRC Real Time Information (RTI) and Universal Credit is 'challenging'

Published on Monday, July 09, 2012

Calling on HMRC to clarify business effects of the Real Time Information (RTI) and Universal Credit initiatives, a National Audit Office (NAO) report describes the timetable for roll-out of changes to the Pay As You Earn (PAYE) tax system as “challenging.”

Under the new scheme, employee tax data will be reported at each pay cycle rather than at year-end.

The timescale for the project requires employers to be submitting RTI data to HMRC by April 2013, the start of the new tax year. This is in order to meet the Department of Work and Pension's (DWP) proposed deadline of October 2013 for the integration of Universal Credit.

HMRC's experiences with RTI migration (a pilot scheme is underway) will be shared with DWP to assist adoption of Universal Credit. However, it appears that HMRC is yet to determine how best to migrate existing tax credit to Universal Credit. The NAO also suggests that the treatment of outstanding debts is yet to be decided.

The report, regarding HMRC's 2011/12 performance, praises the overall approach to the project, including its "customer-centric strategy" and desire to "co-ordinate delivery of major projects." However, it concludes that "the department does not have an organisation-wide operational strategy."

HMRC is under pressure to help employers understand how tax administration will run in the future and how to achieve compliance in the time allowed. Amyas Morse, head of the National Audit Office, suggests that, "before implementing significant structural changes, the department needs to be clear about what its future operating model will be."

For more information please see the original Guardian article or the National Audit Office report.