Sue Higham (PAYE, SA, NIC Process - MPPC) Chair
Ian Atkin (PAYE, SA, NIC Process)
Colin Henzell (PAYE - MPPC)
Pam Jones (IMS Portfolios)
Jackie Lockwood (IMS Portfolios web solutions)
Sue Manley (PAYE - MPPC)
Neil Stenton (PAYE - MPPC) Secretary and minutes
Caroline Wood (PAYE – MPPC)
Ken Voller - Institute of Chartered Accountants in England & Wales
Chris Hind - British Chamber of Commerce
Norman Green - British Computer Society
Matthew Brown - Chartered Institute of Taxation
Elaine Gibson - Institute of Payroll Professionals
Marcia Bowen - Payroll Alliance
Diana Flier - Business Application Software Developers Association
Maria Hennessey - Electronic Exchange User Group
The Consultative Forum Chair opened the meeting at 10.35 and passed apologies from Roger Smith MPPC Programme Director, Carolyn Parmeter BCU Carter Programme, Jen Morgan PAYE – MPPC and Simon Lidster PAYE – MPPC.
Following a review of, and update to, the action points from the previous meetings the minutes from the last meeting were agreed.
HM Revenue & Customs (HMRC) advised they were re-writing the ORF-PAYE service in line with Double A Accessibility standards. One of the noticeable changes resulting from this is a change to the alignment of fields, from left aligned to centre to allow users with magnifiers to use the service more easily. The validations and functions will remain the same and a decision has been made to go live with the new service in October 2008 for the end of year and in-year movement processes but no expenses or benefits functions, other than form P46(Car). The P11D and P9D processes/functionality will go live in April 2009.
Testing of the new product is now underway and testing of the data to be moved is also being carried out. HMRC confirmed it would only migrate the submitted data from the old service to the new, leaving the unsubmitted data behind. There is a warning on the current application about the migration of data as well as a reminder for employers and agents to copy or store any unsubmitted data if they wish to retain it themselves, rather than lose it (this will need to be done to the employer/agents own data storage facilities). HMRC advised it will be able to view, if required, any data for earlier years not migrated across to the new service for up to one year, should a request be made by an employer. As already advised, data for earlier years will not be migrated and will be deleted from the service by October 2009.
The data has been/will be transferred in stages starting with data held up to the end of May 2008, followed by a second cut of data up to the end of August 2008 and completed by data held up to the 21 October 2008. There will be a period of service downtime, 22 October 2008 to 27 October 2008, to move the data from the old to the new service. There will be approximately 27 million records to move and so far the data is posting on to the new service without too many problems. If HMRC cannot sign the new service off completely at 27 October 2008 it will continue to use/provide the old service. Cases which are proving to be a problem at the present are being looked at and cleared in isolation and the communications team will be looking at issuing messages about any problem areas and cases.
HMRC raised the issue of employers submitting end of year employer returns in parts and advised it was looking at this area in line with moving the end of year process on to the same IT structure as the in year process (ChRIS). HMRC is working on the assumption that the need for part returns is still required by employers and agents but recognises that these can be problematic. ES confirmed that the need for part returns to be made was still required and asked HMRC if it had considered making the P35 the last part of the return to be accepted, after all the P14’s had been submitted by an employer. ES advised that best practice had shown that submitting the P35 after all P14s had been submitted was a much easier process when filing end of year, as part of the problem encountered by employers was not knowing how many parts the return was going to comprise or where they were going to be filed from. HMRC advised that it would take the promotion of this best practice forward, as well as publicising a list of common end of year errors, to make employers more aware and would come back to the group if further information was required from the members.
ES and HMRC discussed the merits of producing an option to indicate which part each submission was at any stage of the end of year filing process (ie 1 of 4, 2 of 4 etc) but this option was discounted as impractical as parts may not be submitted by the same person. Members agreed that a strong relationship between the employer and agent was more important when submitting part returns.
HMRC thanked the group for the discussion and advised it would take away all the points raised for further review.
HMRC confirmed that the penalty structure planned for in year online filing only related to employers who continued to file on paper when they should be filing online. HMRC advised that letters would be issued on a quarterly basis to employers who did not file online when they should have, but that it was only during the last quarter of the tax year 2009-10 that a penalty would be considered. ES queried what would happen if an employee sent an in year form to HMRC by post, for example if the employee had previously held more than one employment, would this generate a penalty for the employer. HMRC advised that it shouldn’t as HMRC would be able to identify this was the case as a separate system would be used to handle this form. HMRC will confirm that this is the case. ES queried what would happen if the date of commencement was at the start of the tax year but the form was not sent online until the end, would this generate a penalty. HMRC confirmed that it would not as there was no penalty for a delay in submitting the form within the year. HMRC advised, however, that it would monitor the situation with a view to further changes if this matter became a problem or more widespread.
ES queried the value of the penalties and their basis for calculation and HMRC advised that this information was now available in the PAYE regulations but that full details would be provided to the group for information purposes.
ES queried what an employer would do if the employee produced more than one P45(3) when commencing employment, which form would the employer use. HMRC advised that the software developers notes for September 2008 would have a list of frequently asked questions, this issue was included within the notes, but the employer would only need to use one P45(3), other/further P45(3)s would need to be passed back to the employee.
ES has asked for this agenda item to raise a query where a default P46 was submitted by an employer, closely followed by an actual P46. This issue/scenario was discussed as part of the review of action points from previous meetings, see action point 16 from previous meetings.
HMRC confirmed that the decision to defer the implementation of the new PAYE service had been made in mid July 2008 and an announcement had been made shortly afterwards. The current situation is that HMRC are considering future dates for implementation but need to consider various business cycles and be able to ensure successful implementation. A further announcement is expected in October 2008 and the group will be updated as soon as possible. The communications team will continue to maintain momentum within HMRC.
HMRC updated the group on the following other areas:
The October downtime is scheduled to be between 22 October 2008 and 27 October 2008 and communications around this have been covered in the new in-year pages on the HMRC website and also within the August 2008 Employer Bulletin. More messages are planned as the period approaches and the HMRC service availability webpages should be referred to for the most up to date messages.
Messages on the withdrawal of bulk codings by magnetic media were sent out to relevant users on 29 August 2008.
A letter to agents in relation to future Carter changes is to be issued between 17 September and 22 September 2008.
A letter in relation to the withdrawal of bulk P6 and P9 codings is due to be issued shortly.
The employer snapshot letter is to be issued in November 2008 and the communications team have had some input in to the messages within the letters.
The guide to filing PAYE forms online is in the process of being updated and HMRC advised it would ask the group for feedback and comments in due course. It may be that the whole guide is given an overhaul in the future; the group will be advised of any plans.
The HMRC in-year webpages have also been updated and are now live, HMRC thanked the group for their involvement in this area.
ES advised that there did appear to be some medium sized employers who were still unsure about in year online filing and that this area needed addressing. HMRC confirmed that there was a continued need to encourage employers to carry out business online and this included receiving information online rather than on paper. HMRC advised it was currently working on a project/package which would be provided to employers as a computer desk top application to enable employers to receive and handle electronic notices more easily. HMRC will be testing this service within the next few weeks and asked the group if it would like to be involved in this process. ES advised they would be very interested and agreed to forward details to HMRC who, in return, agreed to provide a brief outline of the functions the new service would provide.
HMRC asked the group if there were any other areas which should be reviewed in relation to communications and ES advised there were none at the present time. ES passed on good feedback to the communications team in relation to the recent communications on the September 2008 allowance changes and HMRC thanked the group for their continued assistance.
ES queried whether the facility to provide cumulative codes for both D0 and NT codes would be delayed until the new PAYE service came in and HMRC confirmed this would be the case. HMRC advised that this issue would be covered in the software developers notes which will be issued in September 2008.
HMRC asked the group if they had experienced any problems with the September 2008 allowance changes and the group advised that it was possibly too early to say. ES advised they would contact HMRC if any problems did arise.
ES queried the recent HMRC document which celebrated the successes around filing of the 2007-08 end of year returns. ES stressed that the full end of year process had not yet been fully completed and thought that the celebration was premature. ES stated that the front end process may well have proceeded without problems but that the final end to end process had yet to be completed, the above document didn’t seem to reflect this. ES advised that some members would be responding direct to HMRC about the document and raising problems which were still arising when employers filed their year end returns. HMRC advised it was aware of ongoing problems but that the document actually related to the overall management of the end of year peak, but would take on board the comments made by ES. Additionally HMRC advised that it would provide the group with filing percentage figures for the 2007-08 period shortly.
HMRC advised that it would shortly be looking to set dates for meetings to be held in 2009 and would advise the group in due course, the dates would also be published on the HMRC website.
ES queried the usage of the new form P46(Pen) from April 2009 onwards and asked if it was expected that the form be used in place of form P45(3). HMRC advised that it was trying to encourage employers to use the new form in place of form P45(3) as this would enable the identification of new pensioners to be carried out sooner rather than later. However, employers could still use form P45(3) if they so wished. Full guidance on the use of form P46(Pen) is currently being written and further guidelines are also on the way.
Next meeting will be held on 26 November 2008, venue to be advised.
Forum ended at 13.05
List of new action points – meeting of 10 September 2008
1. HMRC to take forward the promoting of best practice when completing and filing end of year returns and publish a list of common end of year filing errors.
2. HMRC to confirm that an employee sending in year forms by post does not generate a penalty for their employer for not filing in year online.
3. HMRC to provide the group with full details of the in-year forms penalty calculation and amounts.
4. ES to provide details of parties interested in carrying out testing of new desktop application for managing electronic notices.
5. HMRC to provide details of functions within new desktop application for employers to manage electronic notices.
6. HMRC to provide the group with percentage figures for 2007-08 end of year filing.
7. HMRC to confirm dates of meetings to be held in 2009 and provide the group with a list.
1. ES asked if there are any plans to notify National Insurance number verifications, after data migration, to employers, electronically rather than on paper. Closed. HMRC advised there are no plans for electronic notifications.
2. ES asked what the file size limit for Internet submissions was. Closed. HMRC advised that the advertised maximum file size limit at the Gateway is 25 million bytes (approximately 23.8MB) although reports that the Gateway was not accepting files of this size are being investigated. Some services do have smaller file sizes implemented, MOV has a maximum file size of 5MB.
3. HMRC will advise of any areas identified which need attention following the current review of data migration and ask for input/suggestions. Closed. HMRC will continue to update the group on this area and will also advise if further input from the group is required.
4. ES suggested a change to the search facility on the HMRC website to ensure form P46 appears at the top of any list of ‘hits’, this should avoid confusion with form P46(Expat) which could then be placed at the bottom of the list. Closed. HMRC advised that following further research on where to place the form on the website it has been decided not to stipulate where the form appears in a list of search hits, the form will be as accessible as any others, but will its use will be clearly signposted to avoid any confusion with the ordinary P46.
5. ES asked if HMRC would consider producing an electronic function for employers to indicate, at the year end, the type of employer return/s needed for their circumstances, and whether a PAYE scheme should remain open. Closed. HMRC have taken this point forward and are reviewing the structure required. ES stressed concerns over the exact wording required to avoid PAYE schemes being closed in full, rather than cancelled for one year only. HMRC advised it would pass these concerns on to the team reviewing this area.
6. HMRC to review employer correspondence strategy with regards to important downtime and migration announcements (ie Employer Bulletin may not go directly to employer but ‘acting’ agent). Closed. HMRC advised that the communications strategy was ongoing and that the normal routes for software developers would remain in place.
7. ES asked HMRC to consider altering the wording on the snapshot letter to raise awareness of employers altering the size of their workforce during the October 2008 downtime period. Closed. HMRC advised the snapshot letters for this year had now been finalised and appropriate messages around online filing deadlines had been included.
8. ES raised a query on the wording around form P45(3) within the P49 booklet. Open. HMRC advised that the wording suggesting the employer contact the HMRC helpline (which seemed to be causing problems for software developers) was in place for new employers and considered it was better to provide further guidance to employers over the telephone. HMRC asked if ES had any examples of problems this was causing to pass them on for further reviewing. ES advised it would provide HMRC with a suitable text extract for inclusion within the software developers notes.
9. On the new online form/returns, ES would like to see use of text validation input method instead of existing dropdown boxes and asked for consistency within the screen input boxes and form titles throughout all forms (throughout government departments would also be desirable). Closed. HMRC continue to work in this area and have made some alignment already. However, long term it is going to be harder to convince other government to adopt this method, work will continue.
10. ES asked HMRC to improve current guidance for issuing P45s and are worried that allowing issuing of P45 in both colour and black and white could lead to increased amount of queries for both Employers and HMRC. ES asked for specific guidance to be added in the helpcard advising employers what to do if they identified a P45 that had been tampered with or they had suspicion that a new employee might have misused this form. They also asked that the helpcard make clear what the employer responsibilities are in the event of misuse. Closed. HMRC have considered concerns and issues around this area but advised that there is no change to the way the employer handles the P45 and, as long as he acted in good faith, would not be penalised if forms had been tampered with by employees. HMRC are currently updating the guidance and help books in this area.
11. HMRC announced that it has been decided to issue separate guidance for Employers providing pension schemes to their employees will be published on the Internet as soon as possible. Open. HMRC still working on this guidance.
12. ES asked if employers could use D0 code for excessive salaries instead of BR code; this issue had previously been considered and rejected HMRC. Open. HMRC advised that this issue had been taken forward to the policy team and this issue is currently under review. A further update will be provided at the next meeting.
13. ES said employers cannot file P35 with employee National Insurance Contribution and a nil employer National Insurance contribution on the P14. HMRC said that there were no plans to provide this facility for a direct payment cases. Open. HMRC provided a response on this issue but the outcome was still not clear. ES advised that the problem could lie with the validation rules for the P14 and HMRC advised it would review this area and feedback to the group.
14. ES said that if a 2007-08 P46 is submitted in 2008-09 automatic tax code population will allocate a 2008-09 code. Open. HMRC advised that the issuing of a tax code in this case is the correct procedure but advised it would consider an appropriate message for employers to advise of this.
15. (i) ES queried a problem with employers receiving signed P46’s
from their employees, where no box had been ticked, and what action they
were to take in these cases, they also asked for suitable guidance for
employers that include forms P46 in their contracts of employment. Closed.
HMRC advised that this issue was covered in the Software Developers notes
issued 24 June 2008.
(ii) ES asked if a P46 option ‘N’ could be developed to allow
for P46s which had not been ‘ticked’ by employees, this would
then default to ‘C’ on the HMRC system. Open.
HMRC advised that clarification on the completion of the P46 may be all
that is required and agreed to take the issue forward and advise the forum.
(iii) ES asked for further guidance on Student Loans and P46s held within
contracts of employments. Closed. HMRC advised that if
employers were looking to include the P46 questions within an employees
contract of employment (in place of providing the employee with a separate
P46 for completion) it was important to include all the questions from
the P46 to ensure that full details are obtained from the employee for
audit purposes. HMRC would look review this area further.
16. ES said that if blank P46s have been sent (due to third party software glitch or operator’s error) a second properly filled one is rejected by the system. Closed. HMRC advised that this problem relates to the current IT system and should not arise when the new PAYE service is in place as the new PAYE service will be able to cope with multiple forms from employers.
