Reply to: This whole RTI thing

[d000hg]

Yes, and HMRC will therefore need the personal bank details of just about everyone of a working age in the UK. So no potential security issue there then ...

Considering just how many companies* hold account details of sizeable portions of the population, I don't really see that as such an issue.

* the big energy companies, water companies, BT, banks each probably have info on 10%+ of the population. TV licensing a far bigger chunk. And of course the government already has one bank account for virtually every household for council tax (though probably not centralised).

A plan B - set up a company specially targeted at helping HMRC do this stuff?

[Jessica@WhiteFieldTax]

From an accountants perspective, the concern is that across NNN clients, theres quite a sizeable admin overhead.

At present we can generally set up salary amounts and payslips in advance at start of year / change of circumstances / client joining - what RTI will mean is a monthly press of the button. In theory not a issue, but over NNN clients, login for each one, couple of mouse clicks, etc, it will be a issue. Hopefully some batching software will come to market, but then theres a cost tradeoff cf using good value MoneySoft payroll.

Its not new - we've had similar for the Construction Industry for a few years now.

And, of course, coming on the heels of this soon, will be Automatic Opt In for pensions.

The whole direction of travel is to make payroll, even for the smallest businesses, more complex. In theory good for my business - accounting - but I'm not sure whether clients are going to want to pay us to do what the government was doing... Its actually a huge transfer of responsibility from government to private sector with, inevitably, no compensation. Guess thats the way of the world but it would be nice for that to be made clear upfront!

[captainham]

Yes, and HMRC will therefore need the personal bank details of just about everyone of a working age in the UK. So no potential security issue there then ...

Perhaps they can link up with RBS/Natwest to actually issue the payments, it would be a match made in heaven.

[borderreiver]

The employers will have to pay HMRC in sufficent time for them to make the employee payments on time (think really bad negative cashflow)

Yes, and HMRC will therefore need the personal bank details of just about everyone of a working age in the UK. So no potential security issue there then ...

[minstrel]

I personally think it makes sense for FreeAgent to leave that stuff for someone else to worry about whilst they concentrate on the core app.

IMHO payroll should be part of the core app.

The PAYE is system is not trivial, but it's no more complicated than adding, subtracting and multiplying a whole bunch of numbers and keeping track of them. Changing thresholds each year is easy to manage if they code it sensibly.

If FreeAgent doesn't sort out payroll and RTI, the app no longer becomes a one stop shop to support all standard contractor accountancy needs. I'd be reluctant to have to pay for a subscription for separate payroll software for 12 simple monthly payments of £634 (or whatever the figure is) and a couple of pounds Tax/NI each month.

[geoff from contracta IOM]

But as I say they will then need details how to make the payments. So that's more work for both sides.

Also, won't it delay payments reaching employees when they have to wait for payments to clear and be verified before passing them on?

As an employer I'd feel pretty crappy if my employees were being paid late and I couldn't do anything about it.

The files sent in the course of RTI give them all the info they need.

The employers will have to pay HMRC in sufficent time for them to make the employee payments on time (think really bad negative cashflow)

The employer will likely be held accountable by the employees for late payment or HMRC will, in which case think poll tax riots

[Maslins]

Tweet from FreeAgent 1 hour ago:

"Will do. TLR > We won't be building RTI into FreeAgent but we will look to integrate with apps that do."

I'm no software developer, but I think getting payroll to work properly in all situations is no mean feat. So many possible complexities, maternity/paternity pay, statutory sick leave, student loans etc etc...plus all the thresholds change every year.

I personally think it makes sense for FreeAgent to leave that stuff for someone else to worry about whilst they concentrate on the core app.

Edit - that's not meant to be a big smiley in the middle of their tweet...but to be honest I dunno what their abbreviation meant anyway.

[minstrel]

I hope you're right. Last I heard they were more likely to link via APIs with an external payroll provider, rather than get the inbuilt payroll function up to scratch...main reason being the existing inbuilt one is a long way short of what's needed, RTI or otherwise.

+1

FreeAgent is generally very good, but the payroll function is definitely their Achilles' heal and lets them down. I don't understand their reluctance to get it working properly - it can't be that hard.

If they don't sort out HMRC RTI integration for PAYE it will be a massive disappointment. Even if they don't fix the payroll, it should be fairly straight forward to implement a web service call to PAYE RTI similar to the VAT one using the manual PAYE figures.

[d000hg]

I get the impression that the company would do all the payroll work then send the gross wages to HMRC and they would pay the net amount to the employees.

But as I say they will then need details how to make the payments. So that's more work for both sides.

Also, won't it delay payments reaching employees when they have to wait for payments to clear and be verified before passing them on?

As an employer I'd feel pretty crappy if my employees were being paid late and I couldn't do anything about it.

[tractor]

..

I get the impression that the company would do all the payroll work then send the gross wages to HMRC and they would pay the net amount to the employees.

No chance of a balls up there then

HMG show time and again that they can't even operate PAYE properly. This will go the way of the NHS patient records.

[geoff from contracta IOM]

I can't really see that happening, and it's got nothing to do with Nazism

It sounds that would mean more paperwork when you get a new employee, setting HMRC up with their bank details, etc. Or is the idea HMRC would actually BE your payroll department so you would add new people to payroll only once, on the HMRC system?

Sounds like a lot of IT work needs developing

I get the impression that the company would do all the payroll work then send the gross wages to HMRC and they would pay the net amount to the employees.

No chance of a balls up there then

[d000hg]

In future HMRC will be able to see what any individual is paid and consequentially amend any benefits (including child benefit). What is really worrying is that long term, HMRC want to administer the pay themselves. They are aiming for employers to transfer salaries to the Revenue who will then forward onto employees their pay less tax.

It should :nazi::nazi::nazi::nazi::nazi:

I can't really see that happening, and it's got nothing to do with Nazism

It sounds that would mean more paperwork when you get a new employee, setting HMRC up with their bank details, etc. Or is the idea HMRC would actually BE your payroll department so you would add new people to payroll only once, on the HMRC system?

Sounds like a lot of IT work needs developing

[bless 'em all]

Absolutely. And it's those that will cause the headache for the accountants - people who change their minds half way through, take more than you set up, take less than you set up, start paying their next door neighbour's dog without telling you etc.

Fun times - just wait until they start doing it with benefits in kind too, imagine the loan account trauma!

The submissions are based on the cumulative YTD figures, so as long as you're TELLING them something, and paying the same in PAYE, on time, then it can all be tidied up at year-end.

If you've underpaid, the final submission would contain the actual YTD and if you've overpaid then the overpayment will be on your PAYE account as a credit.

Apparently.

[SueEllen]

They are aiming for employers to transfer salaries to the Revenue who will then forward onto employees their pay less tax.

It's to stop employers not paying HMRC on time which some companies do.

So in theory if HMRC aren't paid then neither will the employees, so the employees will put down tools.

[Clare@InTouch]

Yes and yes.

My point is that a lot of people don't plan in advance, just take cash, submit nothing, and rely on it all being sorted retrospectively at year end.

Like I say, the regular posters on here will no doubt be up to speed (at least by April) and will likely take note of what their accountant suggests. I'm sure Clare would agree with me that there's an awful lot of contractors out there who aren't so savvy, nor do they necessarily do what we recommend they do.

Absolutely. And it's those that will cause the headache for the accountants - people who change their minds half way through, take more than you set up, take less than you set up, start paying their next door neighbour's dog without telling you etc.

Fun times - just wait until they start doing it with benefits in kind too, imagine the loan account trauma!