HM Revenue & Customs (HMRC) representatives:
Sue Higham (PAYE, SA, NIC Process - MPPC) Chair
Don Macarthur (BCU)
Simon Lidster (PAYE - MPPC)
Jen Morgan (PAYE - MPPC)
Colin Henzell (PAYE - MPPC)
Sue Manley (PAYE - MPPC)
Tim Downes (IMS Portfolios web solutions)
Neil Stenton (PAYE - MPPC) Secretary and minutes
Nigel Flaherty (PAYE - MPPC)
External Stakeholders attending:
Institute of Chartered Accountants in England & Wales
British Chamber of Commerce
British Computer Society
Chartered Institute of Taxation
Institute of Payroll Professionals
Payroll Alliance
Business Application Software Developers Association
Federation of Small Businesses
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 and the main representative from the Institute of Payroll Professionals (IPP were represented on this occasion by another attendee).
The minutes were reviewed and after the following amendments/queries were raised from the last meeting, the minutes were agreed.
Data dictionary – the actual suggestion was to use ‘family name’ rather than ‘last name’ or ‘surname’.
Data migration – ES asked about enhancing the notification to employers by providing this electronically, rather than on paper. HMRC advised it would review and confirm any plans to the group.
Carter update – HMRC confirmed the phrase 'the limitation on file
size on internet has been fixed' actually related to the problem being
addressed, rather than setting the size of the file. Additionally HMRC
agreed to advise ES what the actual limit size of the file was.
The Action points were also discussed and updated, details of the latest
position are entered next to the action points. The forum secretary will
publish the minutes from the last meeting (30 April 2008) on the HMRC
website shortly.
HMRC has appointed an outside body to carry out a review of MPPC readiness. They have been with HMRC for four weeks preparing a report to identify any areas that need strengthening. They will continue this review for a further short period and are assisting with HMRC planning and business change areas, and also with customer handling strategy.
HMRC advised that as and when any areas have been identified which need attention, the group will be updated and asked for their input.
HMRC has been reviewing all aspects of the programme in order to inform a Go/No go decision. This is a necessary review as, if HMRC decide not to continue, in October work will need to be done to decouple HMRC from the wider Departmental Enterprise Release.
HMRC are planning on making this decision on 1 July 2008, but have scope to delay this up to 26 July 2008.
DMSA went live three weeks ago using 1,000 records as a sample, this involved aligning individuals on the existing PAYE computer system and the National Insurance Records System using designatory details. The 1,000 cases were reviewed to ensure the matching criteria were robust and that HMRC were properly aligning individuals. HMRC are happy that the rules are working and will start to increase this alignment work this week. Where the system cannot decide, a work item will be passed to a central unit to review the cases using all the information at their disposal. At this stage HMRC are not trying to trace National Insurance numbers for cases where one is not held, tracing will start at the end of July 2008, employers will therefore not start to receive forms P46-5 just yet.
HMRC recognises the only impact there might be is where the spelling of an individual’s name is changed slightly because spelling on the National Insurance Records System has been accepted as correct. HMRC will match on the first three characters of surname together and where certain that this is the right person will change the name spelling on its PAYE computer system.
Business Simulation involves putting the PAYE service and Work Management into a situation that mirrors how the new IT and business processes will actually work in real life and involves a large number of business areas.
This will enable HMRC to check that all aspects of the changes work together before go-live in October. It will also allow the opportunity to engage and educate the managers and other key people who will lead and support staff once HMRC goes live. As part of Business Simulation the staff involved will provide regular feedback and will be crucial in highlighting any areas that do need amending.
HMRC advised that Business Simulation is now in its third week of operation and feedback has been good so far. Staff are pleased with the system and are becoming familiar with it very quickly. HMRC advised the system is operating accurately with very few issues being raised.
The second release within simulation, to include End of Year and repayments, is due to go live on 28 July 2008.
HMRC is still working on migration taking two weeks and although the facility to change records will not be available, staff will have the facility to view records in the format they were held on 10 October 2008. A lot of good planning work has been undertaken on the Control Go Live, and based on the fact that some Control Go Live will take place during the migration period, HMRC should be able to return to processing after migration ends without too much of a delay.
ES asked if access to the Portal would be affected by the migration and downtime and whether customers would still be able to pick up notices of coding. HMRC advised that the Portal should remain open and would be unaffected.
HMRC provided an update on the in year stationery position and advised that the latest Software Developers notes, issued 24 June 2008, held details of the size of the new forms P45 and also the new form P46(Expat), form P46(Pen) would be released shortly.
HMRC advised that the new P45 stationery was currently being tested by a small number of employers and feedback is expected shortly. The stationery will be released for ordering at the beginning of July 2008. HMRC are currently considering where to place the form P46(Expat) on the Internet to avoid confusion as to who the new form applied to and in what situation.
ES suggested that the search facility on the Internet could be reviewed to ensure that when a search is made for form P46, the actual form P46 appears first and the others follow (form P46(Expat) could be last on the list). HMRC advised it would look in to this as a possibility.
HMRC provided the group with draft copies of the three failure to file online penalty warning letters for information and advised these would be called WL1, WL2 and WL3.
HMRC advised the group that it had been considering an amendment to the guidance held in booklet CWG2 Employer Further Guide to PAYE and NICs in relation to post leaving payments. HMRC was suggesting widening the instruction to employers to provide employees with a letter outlining the payment to include other typed/written documents (for example payslips, emails).
ES confirmed their agreement to this, suggesting a slight change from 'written or typed confirmation' to 'documentary confirmation' and by qualifying this further with confirmation that the payment was a post leaving payment, by way of adding a fourth bullet point to the instruction outlining the details the employer should provide to the employee.
HMRC thanked ES for their comments and advised they would be forwarded on.
ES asked whether HMRC had given any consideration to the facility for employers to electronically notify HMRC that a P35 return was not needed at the end of the tax year. ES advised that employers were receiving mixed messages when contacting HMRC about the need to file a P35 or retain a PAYE scheme.
HMRC advised it was looking at providing a facility for employers to notify these details and confirmed it was important that employers advised HMRC as to whether a P35 was required, or indeed a PAYE scheme. This information is important in order to ensure HMRC only maintain correspondence on PAYE matters with those who need it.
ES queried whether HMRC could develop a facility whereby the employer could access an online checklist to identify which, if any, employer returns were needed at the year end, and whether a PAYE scheme should remain open. ES confirmed that this would need to be completed by employers each year as circumstances dictated and could be linked from the HMRC web site.
HMRC advised it would take this issue for review and report back to the group.
ES had previously raised an issue with problems filing P35 with employee only National Insurance contribution deductions. This point is still open and under review in the list of action points shown at the end of these minutes.
HMRC updated the group on communications issues and a proposed communications strategy, which had yet to be formally agreed inside HMRC, and asked for comments from the group. ES advised the following which they felt were of concern:
ES agreed with HMRC that notifying every customer about the downtime and changes to the PAYE service was unnecessary and agreed that contacting specific groups only (already identified by HMRC) would be a better strategy.
ES advised that contact with all employers was a must and HMRC should take note that not all employers received the Employer Bulletin (this depended upon who the employer had advised HMRC to correspond with on the employers behalf). HMRC advised they would review how to ensure all employers got the message.
ES were happy with the suggested proposals for communications.
HMRC advised it had considered this action but had been unable to move the date the letters would be issued because of other operational constraints. HMRC advised that there is still an appeals process available to employers, should they feel that the size of their workforce was incorrect. The appeal does not have to be made straight away, eg if the number of employees reduces significantly part way through the year, the employer can appeal then. ES suggested that HMRC could alter the wording of the snapshot letter to raise awareness of this issue, particularly where employers had revised their staffing levels during the period of downtime. HMRC advised they would take this point forward.
Next meeting will be held on 10 September 2008, venue to be advised. All dates of future consultations in 2008 can be found at Consultative Forum meetings planned in 2008
Forum ended at 13:10
List of new action points – Meeting of 25 June 2008
1. ES asked if there are any plans to notify National Insurance number
verifications, after data migration, to employers, electronically rather
than on paper. Open. HMRC will review plans and feedback.
2. ES asked what the file size limit for Internet submissions was. Open.
HMRC will research and feedback.
3. HMRC will advise of any areas identified which need attention following
the current review of data migration and ask for input/suggestions. Open.
HMRC to advise the group.
4. ES suggested a change to the search facility on the HMRC web site 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. Open. HMRC to follow up and advise the group.
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. Open. HMRC will take this point forward and feedback to the group.
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). Open. HMRC to review.
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. Open. HMRC will take this point forward.
8. ES raised a query on the wording around form P45(3) within the P49
booklet. Open. HMRC will review the guidance and advise the group.
Action points from previous meetings
1. 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). Open. HMRC are investigating
if this can be done, however it is going to be harder to convince other
government departments to adopt this method.
2. 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. Open. 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 would review these
cases with both the old and new employers to identify any problem cases.
Work ongoing on guidance.
3. HMRC announced that it has been decided to issue separate guidance
for Employers providing pension schemes to their employees this will be
published on the Internet as soon as possible. Open. HMRC still working
on this guidance and hope to have it published by the end of June 2008.
4. 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 made clear what employer responsibilities
are in the event of misuse. Closed – now moved to item 2. HMRC to
consult National Risk and Compliance specialists and insert suitable text
on the guidance leaflet.
5. ES asked if employers could use D0 code for excessive salaries instead
of BR code; this issue had previously been considered and rejected by
HMRC. Open. HMRC advised that the regulations stated the code must be
BR in these cases, but will confirm what consideration can be given to
changing this to 0T instead.
6. HMRC will let ES have technical specifications for penalties shortly.
Closed. HMRC provided details and draft letters about the warning letters
for the group (see item 4 on this meetings agenda).
7. ES asked if HMRC could find a way to flag new messages so they can
be distinguished from old read messages (as with MS Outlook for example).
Closed. HMRC can now advise that design improvements are currently taking
place and is aiming to implement the changes in November 2008. These will
include :- improved message downloads, facility to differentiate between
viewed and new messages, improved search functions, improved printing.
8. 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 direct
payment cases. Open. Discussion at the meeting centred around whether
it was the P14 or P35 which stopped final submission. ES agreed to test
this and advise HMRC of its findings so the issue could be taken further.
9. HMRC will stop sending bulk P6B and P9 data on magnetic media and paper
lists to employers from October 2008. Closed. HMRC have started to make
preparations for contacting employers about this and will take this forward
through the Employers Talk events. ES believed that separate notices to
employers, rather than inclusion within other messages, would benefit
the message and employers more.
10. ES said that if a 2007-08 P46 is submitted in 2008-09 automatic tax
code population will allocate a 2008-09 code. Open. No update available
on this at present but HMRC will investigate and report back.
11. ES Asked if there are plans to discard the ninth character of the
National Insurance number. Closed. HMRC knew of no current plans to discard
the ninth digit of the NINO.
Only the first eight characters of the National Insurance number will
be used for matching purposes.
12. ES are happy for a column of sprockets to be removed from A5 P45 continuous
form, but asked for the size of the form to remain unchanged to avoid
automatic printing spilling out text boxes. Closed. HMRC advised the Software
Developers notes issued on 24 June 2008 included all measurements for
the new forms P45, which are moving to A4 size. The new stationery will
be available to order from July 2008. The existing A5 size P45 will remain
in use, with double sprockets, until 5 April 2009 when it will be replaced
by the new A4 size, with single sprockets.
13. 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. 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. ES also asked for further guidance
on Student Loans and P46s held within contracts of employments. Open.
HMRC advised that part of this issue was covered in the Software Developers
notes issued 24 June 2008. HMRC advised it would review these last two
points and feedback.
14. HMRC needs to communicate changes to employees. Closed. HMRC thanked
ES for their assistance in developing the communications.
15. HMRC needs to identify employees affected by the October 2008 downtime
and the most efficient ways to advertise downtime to them. Closed. HMRC
thanked ES for their assistance in developing the communications.
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. Open. HMRC apologised for not having forwarded details
to ES as previously agreed and confirmed it would now locate and forward
the details on this to ES.
17. ES asked if HMRC plans to include a demonstration version of online
filing system on Employer CD-ROM. Closed. HMRC advised it was always looking
at ways to improve the options and tools available to customers in online
filing and that considerations would be given to this.
