Payroll professionals are struggling with HM Revenue and Customs’ real-time information (RTI) services, with some spending years trying to get simple issues resolved, according to a report.

With little ability for employers to verify and address discrepancies between the data held by HMRC and themselves, specialist teams at HMRC have a backlog of queries that continues to grow.

The report, Systemic issues in HMRC RTI data collection and customer experience when seeking resolution, by the Chartered Institute of Payroll Professionals (CIPP), highlights seven case studies of issues that payroll professionals have experienced. In some cases, employers have been waiting more than two years for the resolution of an incorrect charge on their tax account.

HMRC introduced RTI reporting in 2013, requiring payroll operations to report their PAYE information in real time. The CIPP has said that while it generally achieved its aim to make tax processing approachable, digital and fair, this is not always the case.

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Some case studies relay how HMRC agents have been worried about “getting into trouble” for resolving issues or hang up when they cannot assist further.

Jason Davenport, chief executive at the CIPP, said: “We do our utmost to be critical friends to HMRC and look forward to working with them to improve transparency, ensure the correct tax is paid and close the tax gap.

“Errors resulting in disputed charges should be handled transparently and expediently, the CIPP will stand by our members to ensure this happens not just for them but for the whole payroll community.”

The author of the report, Mathew Akrigg, CIPP policy and research officer, added: “Employers and taxpayers need clarity in how their issues will be resolved in a fair and timely manner. We hope this report highlights some of the issues that payroll professionals face daily and encourages HMRC to work with us on a way to move forward and improve processes.”

The CIPP is calling for:

• Greater transparency on the backlog of RTI issues being handled by HMRC
• A review of the RTI system processes causing issues and its capacity for expansion
• Employers to have a view of the RTI data held by HMRC in relation to the submissions sent by them.

With little ability for employers to verify and address discrepancies between the data held by HMRC and themselves, specialist teams at HMRC have a backlog of such queries that continues to grow. As the scope of RTI expands, the CIPP believes the problem may become ever more prevalent in the payroll process.

A statement from HMRC said: “HMRC welcomes the work the CIPP and its members have done to gather insight from employers and payroll providers to produce this report regarding RTI. The majority of the data processed through RTI is correctly allocated, but in the small number of cases where mismatches occur, it is important HMRC and employers take action together to put things right in a timely way.

“We will continue to work with the CIPP on how we can identify necessary improvements to the RTI system, further enhance employer education, guidance and systems, and how we can improve our customer service offering when problems do arise.”

Steve Wade, chair of the Institute of Chartered Accountants in England and Wales’ employment taxes and NIC committee, said: “This report, along with its real-life examples, reinforces the consistent message that ICAEW hears from its members regarding the RTI system.

“ICAEW agrees that HMRC’s RTI system and liabilities and payments databases need a radical overhaul. This was recommended in HMRC’s PAYE post-implementation review report of 2017. Ideally, change should take place before the mandatory payrolling of benefits, including the in-year charging of Class 1A places even more strain on the system.”

Glenn Collins, UK head of technical and strategic engagement at the Association of Chartered Certified Accountants (ACCA), said: “Far too much time is spent on non-productive, basic tax administration and the simple chasing of information. We are hopeful that the additional funding and focus on improved agent service will create a more certain tax environment.

“HMRC’s focus must be on improving customer service and effectiveness to give us the modern, efficient tax system we need, ultimately improving public and private sector finances and boosting productivity in the UK.”

Steve Wilkinson, co-chair of the payroll, pensions and HR specialist interest group at the Business Application Software Developers Association (BASDA), said: “We welcome this report into the state of the RTI infrastructure and wholeheartedly support CIPP’s findings and recommendations. RTI is fundamental to the payroll process, and it is critical that it is fit for purpose; it’s clear from the report that significant further investment is needed from the government – to the benefit of all.”

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