Call This a Service?

Call This A Service?

ALLISON PLAGER laments the Revenue's seeming lack of urgency in getting its online systems to work at full capacity.

AM I MISSING something? Was it not the Revenue's big idea, if not overriding priority, to compel employers to file their end of year returns online, on pain of death practically? Yet here we are, 11 May 2005 (date of writing), past the end of the first tax year for which compulsory online filing applies to employers with 250 or more employees and, unbelievably, the Revenue appears to lack confidence that its systems will cope.

Several notices about online filing have been placed on the Revenue's website since early April. There was also a Tax Bulletin article published early and a separate item in the latest Employers Bulletin . I have also recently started to hear advertisements on the radio about employers' filing online. Actually, the one I heard was quite good, likening the process to an egg and spoon race, with a final comment that calling the Revenue's helpline could be the answer to the filer's prayers. The number is 0845 6055999, but whenever I rang it was constantly engaged. This seems to be a common problem as readers of comments posted on AccountingWeb's Tax Zone PAYE online articles will know. Perhaps the Revenue could have catered for the rush of calls better by installing more lines or employees to take calls.

Flurry of notices

The Revenue can certainly not be accused of keeping quiet about filing online. For instance, the following notice was placed on the Revenue's website on 5 April:

'We have temporarily closed down our secure mailbox [effectively a means of private electronic communication between the Revenue and individual employers] service. This will affect you if you are an employer or agent and use our PAYE Online for Employers - Internet service. We are sorry we have not told you sooner, and are sorry for any inconvenience the temporary closure may cause.

'We have had to close the mailbox so that we can install new software which will let you file your 2004-05 employer's annual return online from 6 April. And because we are expecting thousands of employers and agents to file online from the 6th, we have decided to keep the mailbox closed until the end of the week. This will help lighten the load on our systems at this peak online filing time and minimise the possibility of anything going wrong with our service.

'You will not be able to access your mailbox to view or download your messages and we will not be sending any mail to it until we turn the Mailbox back on 9 April. But if you use payroll software which downloads information straight from your mailbox, you will still be able to get your mailbox information during this period.'

On 6 April, the Revenue's website contained the next episode of the PAYE online saga:

'Our online filing service is running smoothly if you are using third party software. There are still some problems with our new Online Return and Forms - PAYE service and you might not get through first time today. We are very sorry, and are doing absolutely everything we can to address this.

'The secure mailbox service is unavailable until 9 April. If your payroll software downloads information straight from your mailbox, you can continue to use that feature.'

Ominous are the words 'you might not get through first time today'; they bring back unfortunate memories of the self assessment filing online problems on the weekend of 29 and 30 January. Furthermore, it seems to be entirely justified, as experience on the ground seems to be that the Revenue's system is already straining. Paul Aplin, tax partner at A C Mole & Sons and deputy chairman of the Tax Faculty, said that at the end of April, PAYE filing online was working very well, however, his payroll team has since said that 'the Revenue's system has been down several times in recent days and that it had slowed noticeably'.

The secure mailbox was eventually reopened but has now been closed again, as the following notice, posted on the Revenue's website on 9 May explains:

'Our secure mailbox service is not available between 8am and 2pm from 9 to 15 May and 8am and 5pm from 16 to 20 May. This will help lighten the load on our systems during this peak online filing period.

The Revenue also reiterated its call for employers to file early and outside the core business hours.

Ready or not?

Perhaps this is a naïve thought, but has not the Revenue had a couple of years in which to prepare itself for compulsory end of year return filing? It seems not unreasonable, therefore, to expect the Revenue to have sorted itself out completely in good time. Employers must file their 2004-05 end of year returns by 19 May 2005; if they fail to meet this deadline they may suffer penalties unless covered by ESC 46 (see below). This year there is a double whammy for some employers as those with 250 plus employees must also file online, and face separate penalties for failure to do so. Under these circumstances it would, if nothing else, have been only polite for the Revenue to have its systems up and running, thoroughly tested and as foolproof as any computer system can be, by 6 April. But no, this was not to be. In light of this, Paul Aplin said that 'employers cannot be expected to enthuse over the use of systems that cannot be accessed properly at critical times. They certainly should not be compelled to use any system until it has proved itself fit for purpose'.

Also on 6 April on its website, the Revenue published the advance Tax Bulletin article 'Sending employer's annual returns for 2004-05', mentioned above. It mostly concerned filing online. I have to admit to increasing apoplexy as I read the introductory paragraphs about filing online. In summary, the Revenue suggests that employers should try not to file between 10am and 4pm, as these are the busiest times and it may take longer. Never mind that these are probably the most convenient times for businesses to file, as they fall within normal office hours. Does the Revenue expect employers to file at 6 o'clock in the morning or last thing at night or at weekends? The article goes on with the Revenue advising employers not to file on 18 and 19 May (the deadline for employers' end of year returns), as these are peak filing days. It is incredible that the Revenue cannot seem to get to grips with the idea that a deadline is there for a purpose, and if users want to file up to the last minute, that is their legal right, and they have every right to expect as good a service at 11.59pm on 19 May, as they do on the days before. They may even have good reason to file last minute. This does not mean that the system should be able to cope with everyone filing at 11.59 on the 19th. Clearly, it is not possible to create a system that can do that, but it should be capable of coping with a significant increase in demand. The mere fact that the Revenue is saying, at least by implication, in advance that it has not put enough capacity to cope with the last minute flurry is disheartening and poor.

Other organisations' systems seem to be able to cope with deadlines. Take last minute individual savings accounts taken out in time for 5 April. It is in the interest of these businesses that their systems work properly, and they would lose money if they did not, as the customer (keyword) would go elsewhere. The Revenue has the luxury of not having any competitors, and seems to act complacently, expecting all around them to fit in with its plans, before it has even sorted them out.

Recognising the problems and the fact that, this being the first year of compulsory PAYE online filing for some, that there may be teething problems (not just at the Revenue end), the Revenue has confirmed that Extra-Statutory Concession B46 giving employers seven further days after the 19 May deadline to sort out their return, applies to online returns as well as paper ones. This effectively gives employers until 26 May to file their returns correctly, although is not an extension of the deadline, and is a welcome sign of compassion on the part of the Revenue.

The customer

That brings us nicely on to the much over-used word 'customer'. In the real commercial world, no customer would tolerate a service such as is provided by the Revenue. If the employer had a choice of sending his return to another tax-collecting organisation that was proven to have its systems up and running efficiently, then he would. This is not possible, however, as the Revenue has a monopoly and employers have no choice in the matter. The Revenue has a huge responsibility to employers to enable them to file online and on time. This means that systems should be ready and able to cope. The Revenue knows that over 500,000 employers, agents and payroll bureaux are registered to use their online service, and says that it is 'pulling out all the stops to make sure that online filing of employers' annual returns runs smoothly for employers and agents'. It is difficult not to be worried by this statement, as it should be set in the past, i.e. the stops should already have been pulled out. As a point of interest, the Revenue said that by 12 May, 635,500 employers annual returns had been successfully filed since 6 April. It also sent a list of tips designed to avoid mistakes when filing and these are reproduced in the Update section of this issue of Taxation .

When I was in the Revenue, not really that long ago, during my early training, we were told that we should never forget that employers are legally obliged to operate PAYE, and get nothing in return for their trouble. So as Revenue employees we should remember that and act accordingly, i.e. be helpful and appreciative. Recent years' events indicate that this appreciation seems to have completely gone out the window, as more and more responsibilities are heaped on the hapless employer. In fact, filing online should ease the burden, because it cuts out a load of paperwork, saves postage, and is instant. Many employers are successfully filing online and happy to do so. The difference for 2004-05 is that it is compulsory for certain employers to file online, and inevitably this means the numbers of online filers will rise substantially. There is no excuse for the Revenue's online systems not to be fully prepared to meet this demand, and it is a shame that the potential goodwill that could have been generated is going to be less than it could have been.

As Paul Aplin says 'PAYE online has huge potential'. He praised all the 'open consultation and collaboration between the Revenue team and accountants, payroll bureaux and employers'. He said that it is 'however, depressing that once again we have a system that has apparently not been designed to cope with the volume of data that everyone knew from day one that it would have to face'.

Petty

Employers should not send a paper form P35 as well as sending it online, the Revenue has instructed, because if they do, and the Revenue accepts the paper version first, it will treat the return as made on paper, and ignore the electronically filed return. This means that employers who are obliged to file online will be penalised for failing to do so, and those who would otherwise be eligible for an incentive payment would forfeit it. In the parlance of the best chick-lit novels 'perlease'. Why should this be? Who makes up these rules? At best this is trivial and at worst malicious, I can think of no good reason behind this ruling, except to make life easier for the Revenue.

As it happens, given the Revenue's history with online filing, it seems entirely reasonable that an employer might want the safety net of submitting a paper return. However, after one or even two years of, what one hopes will be an efficient Revenue online service, no right-minded employer would want the bother of sending two versions of his return, and the paper one would naturally be consigned to history.

Get on with it

As a parent, I get fed up with constantly harassing my offspring to hurry up; it is just plain annoying, as a taxpayer, having to tell the Revenue to hurry up.

The Revenue offered profuse apologies for its secure mailbox service being closed down, but this is almost embarrassing, and certainly does not create much confidence in the service. It is also very unhelpful as the secure mailbox is where notices of coding are picked up by employers. If they are unable to do so, employees will end up paying the wrong tax, even if only for a temporary period.

Many smaller employers are filing their end of year returns online in order to take advantage of the filing incentives. Again, what was an admirable idea becomes tainted because it seems that the Revenue's system will not be able to deal with it properly. While the front end of the system can accept and acknowledge the return, Paul Aplin said that, according to the latest information, 'the back end will not be live for a couple of months and that until it is, the letters advising e-filers that they can ask for their e-filing incentive cheque cannot be sent'.

Considering the potential for goodwill, the Revenue is instead likely to cause worry and irritation among employers who are obliged to file online, as well as cynicism about its ability to run online services in general.

That is a pity.

Issue: 4008 / Categories: Comment & Analysis