AS MANY as 40,000 people have had their income tax payment fudged by a new government programme known as Real Time Information (RTI) it has emerged.
RTI was designed to allow employers to pay employees and make pay as you earn (PAYE) income tax payments at the same time, and went live in April after a year’s worth of trials. The system is intended to make the Universal Credit easier for businesses.
The scheme gives tax codes to individual workers, many of which have been incorrect, meaning they may be paying too much tax. The failures are said to mostly affect small businesses.
A spokesman from Her Majesty’s Revenue and Customs (HMRC) confirmed the issue: “We are aware of a problem affecting a very small number of employers and a small proportion of their employees.”
“We are urgently working with the employers to solve this,” the spokesman added.
The tax collectors insisted that the new way of paying was generally working well, with more than 1.3m PAYE schemes already reporting PAYE in real time.
On its introduction two months ago, Ruth Owen, a director general at HMRC suggested the programme was the biggest change to PAYE since its beginnings in the 1940s.
Last week, the Major Projects Authority said 22 big government schemes, including the Universal Credit, were either unachievable or had a high likelihood of failure.