PAYE new variable payment plan

From 19th September 2022, in response to feedback, employers’ with PAYE will be able to setup and take advantage of a new variable Direct Debit payment plan being introduced by HMRC.

The service can be accessed through Pay employers’ PAYE or directly through the business tax account and the employers PAYE service.

There will be changes to the business tax account and the employers’ liabilities and payments screens on the employers PAYE service. A new link ‘Set up a Direct Debit’ will be introduced and this will allow employers to set up a Direct Debit instruction, authorising HMRC to collect direct from their bank account based on the HMRC view of their return submissions.

Following set up, the link will change to ‘Manage your Direct Debit’ and an employer will be able to view, change or cancel the Direct Debit online.

The facility to create, view, amend and cancel a Direct Debit is restricted to employers only, there is no scope for agents to do this.

If signed up to variable payment plan, the following charges will be collected on receipt of the returns and subsequent update of HMRC records:

• Full Payment Submission
• Employer Payment Summary
• Construction Industry Scheme
• Apprenticeship Levy
• Class 1A National Insurance
• Earlier Year Update (although these no longer exist!)

How accurate will this be?

Where everything goes smoothly and the HMRC application of data matches the true submission of change data from the employer or their efilin agent, then great, the facility may work well.

However, the RTI update process continues to be problematical! Not all data updates applied by HMRC are correct and the process remains complex.

Inadvertent duplication of FPS records by HMRC still occurs in the millions annually. Although some element of this challenge has shrunk with better data matching routines, duplication and TRN quarantine activity still remains a major challenge for double accounting payment amounts and employer misbalance.

And the EPS remains problematical and confusing for many employers. Since April 2022, the employer is barred from submitting a period EPS after the 19th deadline, you cannot even correct an error, only reflect adjusted values in the next tax month. Employers may receive payment requests for values which are wrong!

Is it time to review and improve RTI?

Real Time Information has brought significant improvements to the HMRC processes, and for many employers the process will be straight forward. For the sizeable small minority (2% of 1.6 million employers is a large number), RTI is causing significant challenges and considerable time impacts. Lots of unconnected processes have been lumbered into the RTI machine which do not fit well.

Why the EPS? Why app levy via RTI. Many of the elements relating to the employer would be best suited through facilities in the employer PAYE online capabilities.

PAYadvice.UK 11/8/2022