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RTI needs to be overhauled, tax experts insist

Her Majesty’s Revenue & Customs needs to overhaul their Real Time Information scheme, according to the insistence of the Association of Taxation Technicians.

The ATT has some serious problems with RTI, a change to the PAYE system which the tax authority pushed through recently. HMRC has been effecting thousands of British workers by sending them inaccurate overpayment or underpayment information, according to a leaked document from the taxman, and the ATT has had it with the tax authority’s perceived bumbling in the matter.

Natalie Miller, ATT’s president, said in a recent statement that the organisation is well and truly alarmed by the development. The debacle reveals how truly flawed RTI may very well be, Miller added, remarking that RTI needs to be reviewed urgently – and that if HMRC had simply listened to organisations like ATT prior to the launch of RTI this situation might have been avoided.

The taxman  started tapdancing immediately, saying that it wasn’t at fault for the overpayment or underpayment discrepancies. Instead, it tried to shift the blame on employers not sending in final payment statements for the 2013-14 financial year – a tactic that backfired, as Miller shot back that if employers weren’t sending in their pertinent details on time, it’s obvious that RTI is too complex for these employers to decipher. Meanwhile, the ATT president also raised an interesting question: why is it that HMRC didn’t know the information was missing in the first place?

Whatever is actually happening here with RTI, it’s obvious to me at least that it’s a complete bloody mess. I know RTI is important to the Government because it’s going to be integral to the new universal credit system that’s replacing state benefits, but I’m leaning towards agreeing with the ATT that the system and its processes are in dire need of a complete overhaul.

It’s obvious that RTI – like all too many other Government projects and programmes – is simply not working as it was intended to do. I know that HMRC doesn’t want to admit it might have been wrong to push for the new system so tirelessly, but I think we’re well past the point of no return right now. You shouldn’t need an entire battalion of accountants to decrypt the esoteric rules and regulations flowing around RTI in order to comply with the measure properly, and if the taxman can’t at least come to terms that it needs to revise its system we’re going to be in deep trouble indeed.

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