The benefits of Real Time Information (RTI) are yet to fully be realised, according to a post implementation review of RTI.
The Real Time Information Programme report, published by HMRC found that, although RTI is performing well, there is frustration among external stakeholders about the perceived slow pace with which RTI data is being used to improve the overall accuracy of Pay As You Earn (PAYE) codes, and to reduce the number of individuals who end the tax year either owing tax or due a refund.
More than three years after RTI was introduced, HMRC is now processing RTI for more than 40 million employees and occupational pensioners to support PAYE and Universal Credit. However, the report acknowledges that there have been a proportionately small number of data quality issues and mismatches between HMRC and employer records, which continue to create discrepancies.
‘This position has been exacerbated by the delay in providing a real time view of RTI data for employers and agents to check against their own records, and the process for amending submissions, which some employers find difficult to follow,’ stated the report.
Despite these issues, RTI has largely been successful and, according to the report, has delivered: savings of £64 million for HMRC; savings of £672 million from reduced tax credits overpayments due to fraud and error and in year income discrepancy; a one-off cash flow benefit to the Exchequer measured at £813 million; and, a net saving in administrative burden for employers of £292 million per annum.
‘Overall, the consensus remains positive that the changes brought in by RTI were necessary, have modernised many PAYE and payroll practices, and reduced error and fraud across government. In addition, we fully accept the lessons to be learned on consultation, communication and implementation,’ stated the report.
Looking ahead, the report outlines a series of recommendations to improve the accuracy of RTI data, communications and guidance to employers, and to fully exploit the RTI data.
