Newsletter Autumn 2013

RTI: Route To Insolvency

Real Time Information (RTI) is creating all sorts of problems with reconciling PAYE payments, and employers are receiving demands to pay PAYE which is not due.

Say you pay statutory maternity, paternity, or adoption pay to an employee. As a small business you can normally recover those statutory payments by offsetting against the PAYE you are due to pay over to HMRC. Under RTI the PAYE you deduct from employees is recorded on the full payment submission (FPS) and the statutory payment recovery is shown on the employer payment summary (EPS).

You need to record those recovered amounts on every EPS you submit for the entire tax year, or the computer at HMRC will forget you have offset those amounts and demand the apparently unpaid PAYE.

Another cause of unexplained PAYE debts is where HMRC has added a 'specified charge' to your PAYE account. This happens when you have apparently not submitted an FPS or EPS for the previous tax month. The specified charge is set at 1/12th of your PAYE liability for 2012/13. The charge can be cancelled if you submit an EPS or FPS for the tax month required.

HMRC should send you a written notice of the specified charge, but this has not been happening to date.

If you receive a call from the HMRC's debt management team demanding payment for unpaid PAYE, ask the caller to demonstrate how the debt arose. Also ask if written notice has been served for any specified charge, as required by the PAYE regulations. These questions should hold off the attack dogs long enough to help you get up to date with your RTI submissions.