Date of Meeting 2 November 2012 Group Name Lincolnshire Chair: HMRC Lead Helen Jepson (HJ) Local Compliance (LC) Agent Representatives attending Matt Herd (MH) Duncan Toplis Mark Poplett (MP) ICAEW Streets Sally Dunlop (SD) Dunlop Accounting Ella Watts (EW) ACCA Ela Watts Accounting Chris Rooke (CR) AAT Chris Rooke Management Limited HMRC attendees Cora Morley (CM) Business Customer & Strategy (BC & S) 1 Apologies: Barbara Harewood; Ian Smith;Christine Newitt 2 Minutes & Action Points Minutes agreed. Action points completed. 3 Closed Issues Post meeting note WT 175 New CT41G process/Registering new companies with HMRC (Closed 24 September 2012). HMRC registration cannot be done at the same time as company formation. Companies House is not routinely telling HMRC about new coys and/or clients losing forms and agents not able to use HMRC website without coy ref. 24/09/12: To help raise awareness of the change to the CT41G process, an article has been published in Agent Update 31 which links to the HMRC published guidance for agents and companies about using the online registration process. It is our intention to include reference to the guidance in Agent Update 32 4 Update on Group’s existing unresolved issues Details issued with final agenda. SD advised recent problem with coding & interaction between NPS & SA. NPS system is ignoring request on SATR not to code rental income. SD had waited 45 days only to have request rejected. EW had similar experience. CM advised that all coding issues are working under Joint Initiative on HMRC service delivery (JISD). Returns need two boxes completing to avoid coding i.e. finishing your tax return Box 2 & Box 3. CM advised that agents should consider submitting to AAM resolution service as she was not aware of any reason that agents request could be met provided all criteria are fulfilled. Agents believed that it was related to HMRC action to remove cases from SA. CR raised issue of CIS repayments (new issue 7.2). The previous resolution is far from satisfactory. Yet again unacceptable waiting times are being experienced. The help sheet is at best misleading indicating the claims are worked within 15 days except at busy periods however delays of months are being suffered. Consideration should be given to an accelerated process ideally instant direct repayments of any undisputed sums. These delays are indefensible especially in current economic climate. HMRC know that work will peak & need to ensure staff is in place to deal with demand. 5 Extract from shared workspace Open Issues Register Issued with agenda 6 Key messages 6.1 Real Time Information (RTI) CM gave update of pilot and points to consider. October 2012 HMRC will write to all employers not in pilot telling them how to prepare. Letters will go to business address only as the statutory obligation to ensure payroll is operated correctly lies with the business. Agents will not get copies. November 2012 HMRC will close any schemes that have stopped operating PAYE. A letter will be sent advising of closure & process to follow if scheme should be retained. New schemes set up from November will start submitting in RTI immediately. They have option to opt out. February 2013 a follow up letter will be sent to employers, business address only, confirming when they are expected to start real time submissions. With a few exceptions all employers who operate PAYE schemes with less than 5,000 will start to report in real time from April 2013. FAQs for non-standard PAYE Schemes In April 2013 HMRC will support DWP Universal Credit (UC) Pathfinder pilot to test the links between RTI & UC system. CM highlighted the limitations of HMRC Basic Tools. Currently the P11 calculator can be used to file an EOY return where there are more than nine employees during the year but only nine or fewer employees at the end of the tax year. When reporting PAYE in RTI the tools limit is no more than nine employees at any time of the year. If the criteria is not met then alternative software will be needed to report PAYE information in RTI for 2013-2014. This will also apply where employers use the tools to collect payroll data and pass to an agent to complete the end of year online submission. Payroll professionals and employers FAQs Guidance for using Basic PAYE Tools to complete 2012-13 End of Year Return Agents raised concerns about: i. the communication to small employers but no agent copies in particular when HMRC propose closing schemes. ii. the lack of support available iii. additional costs for small business iv. Penalties. CM advised that consultation closed 24 September. There may be an announcement at the time of the Autumn statement. Expectations are that there will be a soft landing but nothing is known as yet. v. workarounds for “special cases” e.g. publicans CM advised agents that under consultation & to watch for announcements. PMN: Timing of real time PAYE returns CM outlined need for correct data and drew attention to main areas for error. Agents had some concerns about the alignment process & suggested any guidance must be very clear. Getting your payroll right employee information CM will include in minutes a summary sheet with live links. (page 6) CM will retain RTI as standing agenda item. AP1 6.2 Agent Strategy CM gave update on agent strategy. The AAMs are actively involved in agent strategy & in particular the agent view pilot. Pilot of HMRC's 'agent view' Template 3 v1.0 2 6.3 Joint initiative on HMRC service delivery CM gave update on Joint Initiative on HMRC service delivery (JISD) (formerly JUAP). August 2012 Update 6.4 External email pilot CM gave update on the email pilot which has been extended; agents are now able to submit a scanned signed 64-8 and we are planning to expand again to include SA1/ CWF1 and partnership returns. CM advised anyone interested can volunteer through webpage. 6.5 HMRC website - Gov.uk CM informed group of the launch of Gov.uk on 17 October, initially replacing Business Link and Directgov. For the time being however, HMRC’s website will continue to be the main source of online support for tax agents. There will be no immediate changes to the HMRC’s online services such as Self Assessment Online and PAYE Online. Government online 6.6 Agent publications CM told agents that after consultation it has been decide to merge Agent Update & WT publication. The issues raised and successes achieved will be published in Agent Update rather than a separate Working Together publication. 6.7 Agent Account Managers (AAM) There is a new e learning product on the HMRC site. Tax agents and advisers: new learning modules launched Agent groups can submit a speaker request for RTI presentation however evening events will be at AAM discretion. MH advised that DT had already had the benefit of an AAM presentation on RTI. Speaker Request Form Agents who have registered for the AAM service have been sent an email highlighting useful information of the HMRC website. CM outlined the information & will include copy with minutes. 121001 Hints and Tips for registered agents (10).doc 6.8 Business Record Checks HJ advised the new approach to BRC started on 1 November 2012. Customers who are more likely to be at risk of having inadequate records will be contacted by letter to arrange an telephone appointment to complete a short questionnaire. Depending on the outcome HMRC will confirm to some customers that no further action is required, or, where some issues are identified, customers will be offered targeted self-help education options. Customers who are assessed as being at risk of keeping inadequate records will be referred for a BRC visit. EW expressed concerns that agents are being marginalised. HJ said that this is not intention. Whilst it is not essential clients will be able to invite agents to attend the visit. It is very early days and primarily education led. The premise is to give business the tools to ensure they get it right first time. SD wondered if HMRC will be targeting specific types of business. Agents wondered what criteria would be used for assessing the risk. HJ advised that HMRC do not provide risk profiles. Agents asked about penalties. HJ advised that penalties will apply. If records are inadequate there may be a record-keeping penalty but there will be the opportunity to bring them to an adequate standard. HMRC will specify what improvements need to be made, and will offer help and support to achieve this. HMRC will Template 3 v1.0 3 arrange a follow up visit to check that the necessary improvements have been made and, provided the records are improved and adequate, the penalty will reduce to nil. Where the records have still not improved a penalty will apply. 7 New Issues 7.1 We have noted that when we change our passwords on the Government Gateway, all of our clients are being re-linked to the assistant profiles. Is it possible to have a global change link? MH AP: CM to submit as suggestion. 7.2 Company CIS repayments and why it still takes almost 6 months for repayments even after a paper has been issued by HMRC stating 15 working days (even allowing for busy times the remains an unreasonable length of time) CR Issue discussed item 2 of the agenda. CR added that consideration should be given to rewording or withdrawing the help sheet altogether as it is misleading in its current form. Agents need a realistic timeframe. CR also suggested that the repayment process could be refined. Currently all PYE employer related refunds are made by cheque. Process could be speeded up if direct payments in to bank account. 7.3 Agent accounts managers and the usefulness of having such a link in view of the limited powers they appear to have CR CM stated that the AAMs act as intermediaries where agents are having problems and do not work cases nor can they influence caseworker to queue jump etc. Issues resolution is only part of role of AAM. Agents should take concerns through PBs. 7.4 The none use of specialists in specialist investigations/enquiries CR CR outlined specific case where he had received a letter containing with seventy specific questions. Case had had similar enquiry three years previously and satisfactorily cleared. CR spent some ten hours formulating response only to find that the issuing officer had to pass to specialist to review etc. and was not apparently aware of previous correspondence. HJ apologised for the additional work and advised that officer should be aware of previous enquiry etc but the necessary information may not be readily available. HJ explained the recording process and indicated where problems may arise. The introduction of post scanning should eliminate this. HJ gave brief overview of the new Caseflow Scanning System. Documents received in post will be sent to a central team in Liverpool, scanned, and then linked to the relevant case. An automatic alert will then notify the caseworker that ‘New Documents’ are available for a specific case. Scanned documents can be viewed anywhere in the country without the need to transfer files. The benefits of the new system are that all correspondence including faxes are sent to a central place and are received by the caseworker electronically. It will reduce problems with missing or delayed post. Unless a request to return original records or documents is received any documents not passed to caseworkers will be destroyed after 90 days. Caseflow Scanning HJ also reminded agents that as well the risk based enquiries there is also a random selection which must be followed up. 7.5 a) On form R43 there is a section for the payment to be made to a nominee. On attempting to get Mrs X’s tax repayment paid into Mr X’s bank account I was told this is not possible. I was quoted ‘money laundering’ as the reason. Can HMRC elaborate on this, especially when it’s a husband and wife situation and signed authority given? b) Mrs X originally requested a cheque be sent to Mr X in Australia and we received a tax calculation saying this had been done on 20 June 2012. After a couple of weeks the cheque had not arrived do we asked HMRC to cancel the cheque and send it to Mr X’s bank account (which we later found out not possible – as per point 1). In August Mr X received the original cheque from HMRC in Australia which he mistakenly tried to bank on 21 August 2012. Obviously it then bounced and the client incurred a $1,100 financial loss due to exchange rate differences/charges. Client wants to know why Template 3 v1.0 4 it took 2 months for HMRC post to reach Australia when they say post normally gets there in a week or so. MP CM was not aware of any reason why post would take this time and apologised for the delay. R43 notes state “If you want the repayment to be credited to a bank or building society account, the account holder's name must be the same as the name of the person entitled to receive the repayment”. MP should consider following complaints process. Date of Next Meeting Friday 8 March 2013 Friday 19 July 2013 Lawress Hall Lincoln Summary of Action Points AP1: CM to include RTI update on agenda of next meeting. AP2: CM to submit suggestion re password changes on Government gateway. Summary of hyperlinks Agent Update 31 FAQs for non-standard PAYE Schemes Payroll professionals and employers FAQs Guidance for using Basic PAYE Tools to complete 2012-13 End of Year Return Timing of real time PAYE returns Getting your payroll right employee information Agent Strategy Pilot of HMRC's 'agent view' Joint initiative on HMRC service delivery August 2012 Update External email pilot Gov.uk Government online Agent Account Managers (AAM) Tax agents and advisers: new learning modules launched Speaker Request Form Business Record Checks Caseflow Scanning Template 3 v1.0 5 Pay As You Earn - Real Time Information For an overview of Real Time Information together with links to more detailed information visit the HMRC website at www.hmrc.gov.uk/rti/index.htm Key Facts Most employers will be legally required to use RTI from April 2013 with all employers submitting RTI before October 2013. The structure of Pay as You Earn (PAYE) remains unchanged, but the way in which you report information to HMRC will fundamentally change. You will submit information about PAYE payments throughout the year as part of your payroll process, rather than at the end of the year as you do now. Data Quality Three key areas account for over 80% of HMRC data quality issues: National Insurance Number (NINO) - leave blank if you do not have the NINO - do not use a default - always use the NINO for the individual in question - validate this with official document such as HMRC or DWP documentation. Full name - do not use initials only - enter forename and surname in separate fields - check correct order of names - enter double-barrelled names into one field - always validate spelling with an official document such as a passport or driver’s licence. Date of birth - enter the full date of birth in the correct format DD/MM/YYYY - do not make one up - do not enter a default date of birth. Data Quality homepage: www.hmrc.gov.uk/rti/dip/index.htm Help and support RTI homepage: www.hmrc.gov.uk/rti/index.htm Guidance on operating PAYE in real time: www.hmrc.gov.uk/payerti/index.htm FAQs for employers: www.hmrc.gov.uk/rti/employerfaqs.htm Data Quality homepage: www.hmrc.gov.uk/rti/dip/index.htm List of Data Items: www.hmrc.gov.uk/payerti/reporting/what-to-report.htm Payroll Alignment: www.hmrc.gov.uk/softwaredevelopers/rti/payroll-alignment.pdf Register for email alerts: www.hmrc.gov.uk/paye/forms-publications/register.htm Payroll software that has PAYE recognition: www.hmrc.gov.uk/softwaredevelopers/paye/rtisoftware-forms.htm Welfare Reform & Universal Credit: www.dwp.gov.uk/policy/welfare-reform Template 3 v1.0 6