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Employers have themselves to blame for the majority of PAYE bills they dispute, according to a report from HMRC.
Employers have themselves to blame for the majority of PAYE bills they dispute, according to a report from HMRC.
The document, Real-Time Information (RTI): Reconciling 2013-14 PAYE Charges, sets out the department’s findings on reconciliation of differences between the tax the authorities say is due and the amounts firms believe they have to pay. It concludes that most discrepancies are the result of employer error.
Problems have largely been due to “misunderstanding, error or transitional issues as employers joined RTI, and there is no evidence of error in the way that HMRC’s IT systems create the charge”, claims the Revenue’s report, which lists key causes of discrepancies:
- miscellaneous employer error;
- employer payment summary (EPS) returns;
- payments to leavers;
- timing of updates to the taxman’s business tax dashboard; and
- construction industry schemes returns.
Other problems highlighted are the way in which payments are allocated to debts; information displayed to the employer in the business tax dashboard, and misunderstanding about how the employer charge is calculated.
The new document acknowledges that the transition to RTI has led to duplicate employments resulting in an overstated charge, and a small number of full payment submissions (FPSs) have not been passed to the accounting system in time, meaning no charge or an understated charge was created.
The tax department has offered a checklist for employers who have problems reconciling payments:
- EPS has been sent where needed;
- EPS includes the year-to-date figure;
- enough time has been left for HMRC’s business tax dashboard to be updated;
- amount paid to taxman matches those reported in the FPS and EPS;
- leavers and payments after leaving have been correctly reported; and
- Revenue has not allocated payment to a different period.
