Rhonda Howlader (RH) – Co-chair Business Customer Unit
Don Macarthur (DM) – PAYE, SA and NICs
Alison Bainbridge (AB) – Business Customer Unit
Sue Hunt (SH) - PAYE, SA and NICs
Caroline Elvin (CE) – Debt Management and Banking
Pam Barber (PBa) - IMS Software Developers Support Team
Ken Hurst (KH) – Large Business Service
Sue Lely (SL) - Local Compliance
Guy Hooper (GH) - Policy
Tony Verran (TV) - Cent Compliance
Karen Thomson (KT) - Co-Chair - IPP
Ian Whyteside (IW) - AAT
Benn Webb (BW) - CBI
Richard Baron (RB) - IOD
Norman Green (NG) - BCS
Matthew Brown (MB) - CIOT
Alex Rowson (AR) - BASDA
Linda Pullan (LP) - Payroll Alliance
Clive Johnson (CJ) - IAB
Trevor Blackmur (TB) - ATT
Jackie Petherbridge (JP) - FSB
Glenn Collins (GC) – ACCA
Peter Bickley (PB) - ICAEW
Anne Redston (ARe) - ICAEW
Iain Scott-Shore – CBI
John Hampton - CBI
Paul Braviner - HMRC
Tim Downes - HMRC
KT welcomed everyone to the meeting especially those attending for the first time. She explained that DM was stepping down from his position as co chair as he was moving to a new position within the department. She introduced RH as temporary co-chair until DM’s replacement was appointed.
RH explained that as part of her role she had been asked to look at consultation fora to review their effectiveness and value for money. She then asked each member what they thought the benefits of being part of the forum were. She also asked members for their views on reducing the number of ECF meetings from four per year to three. There was considerable opposition to this proposal – reasons being put forward included; the priority that a lot of PAYE issues carry meant resolutions needed to be swift, continuity of support would suffer, frequently don’t get through all agenda items and reducing the number of meeting would compound this. Members did agree however to move the start time of the meetings to 11.30 to allow the chance of booking cheaper rail tickets.
DM also mentioned that proposals had been put forward to extend ECF membership to ensure payroll bureaux were better represented – he suggested that Helen Harvey from Enable and Simon Parsons from Ceridian, (and is also a member of IREEN) would represent large payroll bureaux. All forum members agreed to this.
AP 1/9/09: Start time of meetings to change to 11.30 am from 10 December.
AP 2/9/09: Helen Harvey and Simon Parsons to be invited to join the forum.
Minutes from the previous meeting were agreed. Action points were closed and agreed as appropriate.
AP 3 from previous meeting - CE to look at the current messages on payment helplines to see if they could be shortened. – Closed – CE advised that the current message was 2mins 16 seconds long and would be reduced as soon as possible.
PB asked if there were any updates from Employer compliance re-engineering presentation delivered at the last meeting. SL advised that the trials were continuing until the end of November and no decisions will be made until then but she would deliver an update at the next meeting.
AP 3/9/09: SL to arrange for an update on Employer Compliance Re-engineering project to be delivered at December’s meeting.
GH and TV delivered an overview of new penalties for late paid in year PAYE. This was brought about as part of the Review of Powers, Deterrents and Safeguards and is the third stage of penalties reform under this review. There are currently no in-year payment penalties for the majority of employers. The large employer’s surcharge, although highly effective, can lead to some disproportionate results. Around 40 per cent of employers do not pay their PAYE on time and HMRC has been repeatedly criticised by PAC and NAO for failing to tackle late payment of in–year PAYE. The new penalty regime will provide HMRC with a modern and effective set of tools and help deliver the aims in the O’Donnell Review. A discussion then followed about how the new penalty regime would work and various scenarios were discussed. It was thought it would be helpful if a working example could be included in the PowerPoint slides that would be circulated with the minutes. Members also asked if they could see any draft guidance before it was signed off?
AP 4/9/09: GH to include working example with PowerPoint slides – Closed – Slides attached with minutes now include example
AP 5/9/09: Draft guidance to be circulated to members before being signed off.
SH gave an update on PDV. The new tool had been successfully trialled throughout the summer and the plan is to launch PDV to all employers from the HMRC website on 5 October. Employers and agents can download and install PDV, where there is also help on how to get started. SH advised that if any members had been involved in the testing it is important that they uninstall the test version & reinstall the live version.
Update since meeting – letter to members advising the new version will overwrite any previous version that has been used during the trail. It will recognise any codes and notices that have already been downloaded. It is not necessary to uninstall the version currently being used.
DM gave an update on the where we currently are with our plans to ‘transform’ employer services within HMRC. The main areas currently being looked at are;
An opportunities paper has been drawn up for senior leaders detailing all the proposals and this will gain more visibility across the Department in the coming months. DM explained that at present there is no clarity on exactly what investments there will be in the next few years as there are severe constraints within the Department, Board members are still working on strategic choices to pave the way for the next few years. Members will be updated of progress through the forum.
RH gave an overview of the new National Insurance and PAYE Service (NPS). NPS is a single, national computer system which we introduced in July to replace the 12 regional databases that previously handled PAYE processing. NPS brings together what used to be the National Insurance Recording System (NIRS) and the PAYE elements of the previous system – Computerisation of PAYE (COP). The new service process both National Insurance as well as PAYE.
She advised the group that the major upgrades to our IT systems were completed on time and 43.6 million customer records were successfully transferred to the new system. There are over 28,800 staff, working in 650 teams, who now have NPS. Although NPS is working very well, we are seeing some defects in the live system that were not apparent during testing. We have a highly developed defects resolution process and are applying fixes and changes on a regular basis to ensure good service to our customers.
The introduction of NPS is on a phased programme because of the size and impact of amending the PAYE system. The remaining upgrades, in November 2009 and April 2010, will build on the changes that have already been implemented and complete the functionality for the new system and for the full tax cycle.
The introduction of the new PAYE Service is a rolling programme that will not be fully automated until 2010. In the meantime some underpayments and repayments need to be calculated manually which may take slightly longer that we would like. Following the period of service interruption when PAYE Service was introduced we have now allocated dedicated staff to review repayments. We are working hard to ensure we process these as quickly as possible but apologise if you see any reduction in our Customer Service until April 2010.
A discussion took place about the issues currently identified within NPS particularly the Married Couples Allowance. In some cases where a tax code includes the MCA, we do not hold details of the date of the marriage on our records. The vast majority of customers whose code does not need to be changed during the tax year will continue to receive MCA as normal. However, if we become aware that a code needs to be changed for any reason, the National Insurance and PAYE Service (NPS) will not give the MCA in the revised tax code where we do not have a date of marriage. If our staff are dealing with a case which involves MCA, they will either:
No customer who is entitled to MCA will lose their allowance as a result of this. However, the review of the case may bring to light customers who are not or no longer entitled to MCA and their codes would be amended accordingly. HMRC’s annual re-coding will take place in January 2010 and we will ensure that where codes include MCA this entitlement is not lost where it is due.
RH also mentioned that there were a number of issues which affect agents and asked the forum for their input. An ‘agent matrix’ will be circulated and members were asked to comment on and prioritise the issues listed and also add any additional ones.
AP 6/9/09: AB to circulate agent matrix to members for comment and return by 02/10/09. – Cleared all comments passed to NPS team.
RH explained to the forum that we are reviewing the Employer Orderline process. For the last few years HMRC has been encouraging employers to self serve from the internet, but this has always included the option of having a telephone orderline as an alternative. The Orderline is an expensive way to get information/forms/guidance out to employers and under the current financial pressures we need to encourage employers to self serve. Members agreed with this in principle but only if all products were re-written specifically for the internet as opposed to the current position where paper products are just reproduced on the internet. It was also felt that searching for a specific form/guidance was not an easy task and if we wanted employers to self serve we would need to significantly improve the search facility on our website. Members also asked if we would be consulting on this. RH advised that at the moment no formal consultation was planned but asked members if they would work with us to explore the findings as the review progresses.
AP 7/9/09: RH to invite members to a workshop to explore findings from Employer Orderline review. Cleared workshop arranged for 16 November.
RH explained that there are currently three employer mailings per year consisting of an employer pack (CD-ROM and Employer Bulletin) in February and April/May and an Employer Bulletin in September. Each mailing goes to approximately 1.7 million employers and their representatives. She advised members that HMRC is currently looking to develop electronic mailings. Employers will ‘opt in’ to receiving an email alert advising them that the CD-ROM was available to download and providing a link to the Employer Bulletin. She asked members what they thought of the idea and a general discussion followed. Most supported the idea in theory but thought it may have problems in practice because a lot of employers have restrictions on downloads and the size of the download could be another issue. RH advised that she would keep the forum informed of any developments.
TB previously raised a list of PAYE issues. A written response has been prepared addressing all the issues raised and will be sent to him under separate cover.
PAYE Pooling – MB asked where we were with this. We have completed our informal consultation and are currently engaging with our solicitors and process teams to evaluate costs and legislative implications of changes before we make any recommendations to the Minister. However any changes to IT need to be prioritised, particularly if costs are significant. This topic will be carried forward to a future meeting.
Student Tax Codes. – There was a meeting on 3 Sept where an alternative recommendation was put forward as a way of handling student tax codes. HMRC will consider this and report back at the next meeting which will be 3 October.
Proposed dates for 2010 meetings - 18 March 2010, 17 June2010, 23 Sept 2010, 9 Dec 2010.
Date of next meeting: 10 December 2009 – new start time of 11.30a.m.
