Member Article

The rise of the machines is very taxing

Is automation really the answer to making the tax system work? Some people don’t think so.

As the teething troubles of HMRC’s Real-Time Information system continue – it’s working, we’re told, just not quite as employers might expect – questions have to be asked about whether over-reliance on complex computer systems is really making HMRC more efficient. Or is it just making a different kind of work for employers and HMRC?

Last weekend, the Government Gateway, through which most employers file their RTI returns, suffered an extended “outage”. It meant that numerous employers and their agents were panicking about not being able to file all their year-end payroll declarations on time, at the risk of a late-filing penalty.

This year, the deadline has been brought forward by HMRC by a month, to April 19, meaning that the work of six weeks under the old regime has been telescoped into two weeks under the new. Submission messages were timing out on payroll computers because of a fault on the Gateway. A few days later, HMRC and employers’ payroll systems have just about caught up with the backlog, and there should be no threat of penalties after all. But the system has created a huge amount of extra, unnecessary work, and angst. Some software will have queued the submissions, some will have retried a fixed number of times, and some will have given error messages. HMRC’s system may well have collected multiple submissions of the same return. Only time will tell how much fallout there will be.

This comes on top of

• the erroneous issue in February of RTI late-filing notices to hundreds of thousands of employers who either had filed or did not need to file (IT glitch);
• the issue this week, in 2014-15, of penalty warnings for 2012-13 RTI payroll filings that were all made on time (IT glitch);
• a penalty for non-filing issued to a taxpayer who filed his return on time but against the wrong one of two allegedly ‘unique’ references allocated to him (erroneously) by HMRC’s computer (IT glitch);
• and the rejection by HMRC of P11D reports because it had closed the employer’s PAYE scheme due to inactivity (lack of planning – HMRC itself, rather than the legislation, requires the employer to have a PAYE scheme for P11D purposes, even if the company never pays wages because the owner-director takes only dividends).

Automation is fine when it aids efficient working. But you do sometimes wonder if all the efficiency gains of introducing the PC to the workplace have been wiped out by all the time spent sorting out system crashes, inadequate programming, inadequate training and inadequate man-machine interactions. Tax computing can be very taxing when the machines are allowed to take over.

This was posted in Bdaily's Members' News section by George Bull .