Calls are made for a "soft-landing" on Real-Time Information penalties December 2011
Posted date: 5 December 2011
Penalties for Real-Time Information (RTI) should be introduced via a “soft-landing” period to help employers adjust to the new regime, insists an industry expert.
Ben Bishop, Operations Director at Advanced Business Solutions (Commercial Division), wants HM Revenue & Customs (HMRC) to consider this approach to give businesses the opportunity to get over the “inevitable teething troubles”.
The latest technical update outlines the intentions surrounding charges, which many pay and benefits professionals did not expect.
Graham Camfield, Systems and Payroll Manager at Brendoncare Foundation, commented: “It is a surprise that penalties are being levied on RTI pilot employers. While there is a need for the correct information, to penalise pilot users seems excessive.”
Volunteer employers are due to start submitting RTI in April 2012, with all businesses being phased onto the system between April and October 2013. This will be in time for Universal Credit, the Government’s new welfare system.
An HMRC spokesperson clarified the how the charges will be dealt with during the initial scheme.
“During the pilot year (2012/13) penalties for late filing will only apply to the final RTI submission of the tax year. This is intended to strike a balance between the need to ensure RTI is reported and the fact that during the pilot, employers will be voluntarily using the process,” he said.
There is concern over a lack of flexibility on penalties for those submitting RTI for the first time, once the pilot has been completed. This is particularly true as employers try to adapt their processes, working patterns and undertake necessary training.
“To overcome this, a ‘soft-landing’ needs to be considered by HMRC, similar to the one provided when changes to the filing of the CT600 under the new iXBRL structure were announced,” explained Bishop.
On this occasion, genuine reasons for late filing or an inaccuracy in the returned data were dealt with sympathetically.
HMRC’s spokesperson outlined its current position over the implementation of charges.
He said: “From 2013/14, we expect to charge penalties for late filing of RTI in-year. We will be consulting with stakeholders to ensure that the sanctions are effective. We will also be consulting about plans for implementing the new sanctions.”
Payroll software is expected to deal with most of the automated processes of submitting data to HMRC every time someone is paid – instead of at year end. However, employers may not fully appreciate the change involved or the potential penalties they could face if they do not submit the correct data or at the right time.
Bishop added: “The comfort of a similar, well articulated ‘soft-landing’ for RTI may alleviate some of the concerns, stress and burden associated with significant change.”
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