Posts From July, 2013

NEST Victim of £1.4m Fraud 

NEST fell victim to a £1.4m mandate fraud last Christmas but says that member's pension pots were not affected by the crime.

The government-sponsored auto-enrolment pension provider's accounts reveal the type of fraud it fell victim to, which is understood to be when payments to a supplier are inadvertently diverted to a fraudulent bank account.

It is understood that the fraud occurred in a one-off incident in December 2012 and was spotted in January.

A police investigation is currently underway with efforts to recoup the £1.4m being taken.

A spokeswoman at NEST said: "We have conducted a root and branch analysis of the incident, but it's important to emphasise that no money was taken from the NEST scheme or members' pots.

"We are really sorry that this has occurred as the accounts tell such a positive story with membership growing to 81,000 at the end of the financial year and how well the systems have coped with this step-up in scale."

Since the fraud was spotted, NEST has made changes to "strengthen its defences".

Posted by Gary Wilson Wednesday, July 24, 2013 10:12:00 AM Categories: News

NEST's Government Loan Grows by £68m 

NEST owes the government £239m, its annual accounts reveal.

The loan from the Department for Work and Pensions (DWP) stood at £171m as of 31 March 2012, but increased by £68m in the last 12 months.

NEST intends to repay the loan with charges levied at scheme members, including contribution charges of 1.8%, as well as an annual management charge of 0.3%.

Tim Jones, NEST chief executive, said: "I am proud of what we've achieved this year - we have faced significant challenges and hurdles but have delivered for members and employers.

"We won't always get everything completely right, but we continue to learn and evolve our services to ensure they meet the needs of employers and members."

Posted by Gary Wilson Wednesday, July 24, 2013 9:53:00 AM Categories: News

HMRC: "It is important to record the correct number of hours your employees have worked" 

HMRC is urging payroll to be careful when reporting the RTI hours worked field so staff do not miss out on any benefits owed to them.

Of particular concern to HMRC is the tendency by some employers to mistakenly use the 'other' field rather than select one of the banded-hours options.

An HMRC spokesman said: "It is important to record the correct number of hours your employees have worked to help ensure that they receive the right amount of benefits and tax credits they are entitled to."

For the RTI project to work successfully, the tax department stresses that use of the 'other' field is intended only for individuals with an irregular pattern of employment or where the payment relates to an occupational pension or annuity.

The Revenue is also reminding employers, where staff are paid on a quarterly basis, that it is now time to make their first RTI submission of the current tax year.

Posted by Gary Wilson Wednesday, July 17, 2013 8:53:00 AM Categories: News RTI

Catalogue of Failures Led to Payroll Errors Totalling More Than £70,000 Written Off at Council 

Payroll "human error" as well as audit failures led to overpayments of more than £70,000 being kept by employees at Rutland County Council.

As many as 51 employees at the council received extra wages totalling £83,271 over a four-year period. The council voted in April this year to allow 42 of the overpaid staff to keep their unearned rewards, writing off £73,978 in the process.

An internal audit of the Agresso payroll system in July last year reported "serious weaknesses" but failed to spot the excessive payments that were being authorised by mistake - and were only noticed by a member of staff four months later.

Councillor Martyn Pocock said: "The payroll overpayments and underpayments are exremely regrettable. There is no suggestion of any wrongdoing; this is a very unfortunate case of human error, misunderstanding and a series of genuine mistakes."

A subsequent report into how the errors went undetected found one reason was that the system was unable to account for specific contract conditions of employees - such as not being paid overtime once they reached a certain salary.

A number of the overpayments dated back to 2009 and included 16 members of staff being paid double time on a Sunday when they should have received time and a half, 15 staff being paid overtime when they should have received the time off instead, and 11 staff mistakenly receiving enhancements for weekend working.

The error also led to 58 separate council staff being underpaid by £31,877, who have all since been appropriately remunerated.

Posted by Gary Wilson Wednesday, July 10, 2013 9:39:00 AM

RTi Costs Businesses Double What The Government Predicted 

The cost to businesses of switching to Real Time Information (RTI) is double that predicted by HMRC, according to research by the Forum for Private Businesses (FPB).

Prior to its launch, the Revenue estimated the impact of RTI would require £120m spend by small businesses, but a survey of 4,000 members of the FPB puts the total figure at close to £311m. 

Robert Downes, FPB policy adviser, said: "Government number crunchers never seem to get their sums correct, so it's no wonder small firms are getting jumpy about the cost of pension auto-enrolment, which by its very nature is going to be hugely more expensive than RTI to set-up, deliver and also maintain."

The cost of compliance study by the FPB found that spending on tax compliance by firms has risen significantly since the study was last conducted in 2011.

"We believe this is largely down to RTI, and firms having to pay a payroll specialist to manage their employees' PAYE bills," said Downes.

"By contrast businesses are paying out slightly less on internal compliance managed in-house. The logic here seems to be to pay an expert to do a job they can no longer do themselves, for whatever reason that may be."

Posted by Gary Wilson Wednesday, July 10, 2013 9:30:00 AM Categories: News RTI

NAO Attacks HMRC's Management of RTI 

The Real Time Information (RTI) reform was not properly tested, is poorly designed and is over-priced, according to the National Audit Office (NAO).

In its review of HMRC's progress in introducing the RTI service the NAO said that while it arrived on time the cost of implementing RTI was £356.6m, £115.5m more than originally estimated. As a result the persuit of £953m in outstanding tax for the years 2003/4 and 2009/10 had to be dropped due to the strain placed on the Revenue's resources.

The NAO says that the limited scope of the RTI pilot meant that testing of the project - notably end of year tax reconciliations - is being continued into the 2013/14 tax year and the Revenue's budget does not allow for any significant extra development costs. 

In addition weak areas identified in the pilot stage are reducing employers' ability to produce and report financial information on PAYE and the NAO has told HMRC to "urgently address these weaknesses".

Referring to HMRC's customer service, Amyas Morse, head of the NAO, said it had "a long way to go".

In response to the NAO report, a Revenue spokesman said: "We had to get the balance right between a system that delivers high levels of resiliance and value for money to the taxpayer and we think we have delivered on this commitment.

"The RTI systems are designed so that the failure of a single component, such as a computer server, will not cause a loss of the entire service. In the unlikely instance of a more serious failure in the RTI core service, we can safely queue submissions until the service restarts.

"By the end of the pilot, more than 6m individual employee records were being reported in real time. Since then, more than 1.4m employers' and pension providers' schemes have started reporting in real time."

Posted by Gary Wilson Wednesday, July 10, 2013 9:00:00 AM Categories: News

HMRC Confirms Number of RTI Non-Filers 

Hundreds of thousands of companies that have failed to report Real Time Information (RTI) to HMRC have been contacted alerting them to their obligations.

The Revenue said that 300,000 schemes had not made the switch to RTI by early June and as a result have been sent letters informing them of their legal requirement to have filed PAYE in real time from April 2013.

An HMRC spokesman said: "We know that the vast majority of these 300,000 schemes do not have any employees. It's really important that employers tell us if they haven't paid anyone in the tax month.

"This is easy to do. All the information they need is on our website at If a scheme is no longer needed employers should contact us so we can close it on our records."

According to the latest Revenue figures, nearly 1.5m schemes have now started reporting in real time with 1.9m schemes scheduled to be doing so by the end of this current tax year.

Posted by Gary Wilson Wednesday, July 10, 2013 8:50:00 AM Categories: News

'Mammoth' task for payroll after equal pay victory 

A Scottish local council has lost a long running equal pay battle with more than 250 female employees, leaving a "mammoth" task for its payroll department.

The women who all worked as classroom assistants and nursery nurses for Dumfries and Galloway Council could be in line for a share of £12m in back pay, after successfully proving in court that their ineligibility for a bonus amounted to discrimination. 

The case went to the Supreme Court after an earlier Court of Session hearing ruled that the 251 employees could not compare jobs at a similar pay grade but at a separate location.

A number of Scottish councils were in support of Dumfries and Galloway's legal stance, and will also be forced to review their payrolls.

Jason Jones, head of employee services at Warrington Borough Council, who has been involved in supporting the roll out of equal pay terms and conditions across a workplace, said: "Pay equalisation is a mammoth task for payrollers, especially historical cases or where payroll software does not retro calculate beyond financial years.

"The real difficulty at the payroll end is actually calculating the correct amount due to the employee. In every case I have been involved in it has meant that from the effective date of the award, each and every change that has occurred has had to be recalculated and adjusted manually.

"This is not so difficult where someone works in a static full time position, but life in payroll is never that simple. To be calculated correctly, everything needs to be taken into account - even the correct tax, NIC and pension deductions for the appropriate year."

Union Support

The women were supported in their legal battle by their trade union Unison.

Dave Prentis, Unison general secretary, said: "I am delighted that the Supreme Court has ruled in favour of our women members. It is a shame, though, that they have had to go through this process and endue a seven-year wait, just to get equal pay. Dumfries and Galloway Council should take immediate steps to correct their pay and I urge other councils to follow suit."

Following the court ruling, a spokesman at Dumfries and Galloway Council said: "This judgement has implications for many local authorities and other public bodies. Our Council will now consider its position in response to the Supreme Court judgement."

Posted by Gary Wilson Thursday, July 04, 2013 9:03:00 AM Categories: News

HMRC Invests In Digital Service 

A £200m investment at HMRC should make it easier for millions of taxpayers to access their tax details online, while saving the Revenue £50m a year.

By April 2015, HMRC hopes that as many as 5m small businesses and 2m individuals will be able to benefit from the more simplified digital service.

The investment, announced by the Treasury, also aims to reduce red tape and remove unfair competitive advantages for those who try to cheat the tax system.

Exchequer secretary, David Gauke said: "We want to give people the power to manage their tax affairs online as easily as they manage their bank accounts and this investment will allow HMRC to deliver a digital tax service fit for the twenty-first century."

Lin Homer, HMRC chief executive, was "delighted" at the news of the investment and said the department was "committed to doing business with our customers in the way they want to do it."

Posted by Gary Wilson Thursday, July 04, 2013 8:56:00 AM Categories: News
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