HMRC ‘challenged’ by real time information timetable

National Audit Office says HM Revenue and Customs needs a strategy for RTI and universal credit

The National Audit Office has called on HM Revenue and Customs (HMRC) to set out how its business will be changed by the implementation of real time information (RTI) and universal credit.

In its report on HMRC’s performance in 2011-12, the auditor says the timetable for full implementation of RTI is “challenging” and driven by the Department for Work and Pensions’ (DWP) timetable for rolling out universal credit from October next year.

It says that HMRC started a pilot to prepare for the full roll-out of RTI in April, which will mean that employers and pension schemes must report employees’ income tax and national insurance deductions as they pay them, rather than at year end.

By the end of May, more than 200 PAYE schemes covering 1.5m individual records were using RTI.

The auditor says there are signs of improvement in HMRC’s data quality, which is vital to the successful operation of RTI.

It found that as part of its work to help the DWP design universal credit, HMRC is to share its experience to minimise the risk of error and fraud.

But the auditor also says that HMRC has not yet decided how it will migrate existing tax credit awards to universal credit and how it will treat outstanding debts when it has migrated awards.

“Whilst it has a business plan, a customer-centric strategy and a change programme which is seeking to co-ordinate delivery of major projects, the department does not have an organisation-wide operational strategy,” the report says.

“This strategy would set out how it will deliver tax administration in the future, supported by planning of resources, communications with customers and changes to working practices.

“It would help the department to establish the interdependencies between projects and develop an integrated response.”

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