Could HMRC have a major IT success on its hands?

By Tony Collins

It’s much too soon to say that Real-Time Information is a success – but it’s not looking  like another central government IT disaster.

A gradual implementation with months of piloting, and HMRC’s listening to comments from payroll professionals, software companies and employers, seems to have made a difference.

The Cabinet Office’s high-priority attempts to avoid IT disasters, through the Major Projects Authority, seems also to have helped, by making HMRC a little more humble, collegiate and community-minded than in past IT roll-outs. HMRC is also acutely sensitive to the ramifications of an RTI roll-out failure on the reputation of Universal Credit which starts officially in October.

On the GOV.UK website HMRC says that since RTI started on 6 April 2013 about 70,000 PAYE [pay-as-you-earn] returns have been filed by employers or their agents including software and payroll companies.

About 70,000 is a small number so far. HMRC says there are about 1.6 million PAYE schemes, every one of which will include PAYE returns for one or more employees. About 30 million people are on PAYE. Nearly all employers are expected to be on RTI by October 2013.

The good news

 Ruth Owen, HMRC’s Director General Personal Tax, says:

“RTI is the biggest change to PAYE in 70 years and it is great news that so many employers have started to report PAYE in real time. But we are under no illusions – we know that it will take time before every employer in the country is using RTI.

“We appreciate that some employers might be daunted by the change but …we are taking a pragmatic approach which includes no in-year late filing penalties for the first year.”

It hasn’t been a big-bang launch. HMRC has been piloting RTI for a year with thousands of employers. Under RTI, employers and their agents give HMRC real-time PAYE information every time the employee is paid, instead of yearly.

When bedded down the system is expected to cut administrative costs for businesses and make tax codes more accurate, though the transitional RTI costs for some businesses, including training, may be high and payroll firms have had extra costs for changes to their software.

RTI means that employers don’t have to complete annual PAYE returns or send in forms when new employees join or leave.

The bad news

The RTI systems were due to cost £108m but HMRC’s Ruth Owen told the Treasury sub-committee that costs have risen by tens of millions:

“… I can see that it [RTI] is going to cost £138m compared with £108m. I believe that is going to go up again in the scale of tens of millions.”

She said that in October 2012.

Success?

The Daily Telegraph suggested on Monday that RTI may be “ready to implode”.

But problems with RTI so far seem to be mainly procedural and rule-based – or are related to long waits getting queries answered via the helpline – rather than any major faults with the RTI systems.

In general members of the Chartered Institute of Payroll Professionals report successes with their RTI submissions, and some comment on response times being good after initial delays at around the launch date.

Payroll software supplier Sage says the filing of submissions has been successful. There was a shaky start, however, with HMRC’s RTI portal being under maintenance over the weekend.

Jonathan Cowan from the Sage Payroll Team said: “There was understandable confusion and frustration over the weekend with businesses unable to file due to HMRC site issues.”

Accountingweb’s readers have had many problems – it said RTI “stumbled into action –  but few of the difficulties are, it seems, serious. “Have I missed something, but RTI despite all the commotion doesn’t seem that bad,” says an accountant in a blog post on the site.

Payrollworld says RTI problems have been minor. “The launch of Real Time Information (RTI) has encountered a number of minor issues, though payroll suppliers broadly report initial filing success.”

Comment

It’s not everyday we report on a big government IT project that shows signs of succeeding. It’s too early to call RTI a success but it’s difficult to see how anything can go seriously wrong now unless HMRC’s helplines give way under heavy demand.

It’s worth remembering that RTI is aimed at PAYE professionals – not the general public as with Universal Credit. Payroll specialists are used to solving complex problems. That said, RTI’s success is critical to the success of Universal Credit. A barrier to that success has, for now, been overcome.

Perhaps HMRC’s RTI success so far shows what a central department can achieve when it listens and acts on concerns instead of having a mere consultation; and it has done what it could to avoid failure. They’re obvious precepts for the private sector – but have not always in the past been characteristics of central government IT schemes such as the NPfIT.

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11 responses to “Could HMRC have a major IT success on its hands?

  1. Pingback: Will HMRC’s new £180,000-a-year IT chief want to stay? | Campaign4Change

  2. The whole HRMC department is a joke. I have just been put on hold for 35 minutes waiting to speak to someone, only to be cut off. They promise you much but perform nothing. Regardless of what system they implement they are quick enough to contact us if we are late, but when the roll is reversed their ‘system’ never performs

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  3. Pingback: Is Major Projects annual report truly ground-breaking? | Campaign4Change

  4. RTI is awful and so is the help desk.

    It has been nearly 1 month since I have uploaded the new RTI data and HMRC have still not resolved the issue I am having.

    My employees are due their salaries for Month 2 in 4 days time and I am now unable to calculate their deductions because my issue is still not resolved! It is ridiculous!

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  5. Pingback: Why isn’t Universal Credit IT a disaster yet? | Campaign4Change

  6. If you’re having problems with RTI then try our free online UK payroll system at http://www.phroot.com – no silly software to install and upgrade and backup!

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  7. I’ve just tried to send my first monthly file by HMRC RTI software.
    Having put all the data in, the software refused to connect to HMRC.
    I rang the helpdesk.
    15 minutes later, I finally got through to someone.
    Their first suggestion was my HP laptop (i5, 8Gb RAM, W7 WEI 6.4) was not the right spec. Then they suggested I didn’t have enough hard disk space (I’d have thought 32gb on an SSD was sufficient).
    After 30 minutes, I had had enough of some temp following a script and taking notes (she put me on hold then went off to ask a senior staff member to explain the difference between single and dual core processors).

    I tried emailing the helpdesk (email address on website).
    I did get a reply by email.
    It said I needed to call them on the phone helpline.

    HMRC Helpline ? No, I don’t think so

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  8. I quite agree that we should acknowledge success in government IT when it happens.

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  9. “iXBRL are expensive” should be “iXBRL packages are expensive” …

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  10. “RTI means that employers don’t have to complete annual PAYE returns”. True. They’ll have to make 12 returns, instead of one. Or 52 returns. Or more, in the case of some casual staff. “When bedded down the system is expected to cut administrative costs for businesses” – really? How?

    iXBRL may be a similar success story in the sense you suggest. The system is up and running. But iXBRL are expensive and the process of creating iXBRL accounts and tax returns is time-consuming for companies. Cui bono?

    HMRC may have not one but two IT successes on their hands. But what do the parishioners get out of that success?

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    • On payroll and accountancy websites there seems to be litle questioning of RTI as a policy. Maybe it will eventually cut fraud and error as it is supposed to do. HMRC has listed the benefits and some of the drawbacks on its website: http://www.hmrc.gov.uk/tiin/rti-improving-paye.pdf . Some of HMRC’s systems date back decades and some of its payments to IT suppliers seem unjustifiably high so RTI’s success will make little difference here. But we in the media are quick to criticise when departments and agencies get it wrong (if we find out about it) so we should be prepared to recognise IT project success when we’ve independent evidence of it.

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