The latest Public Accounts Committee report on HM Revenue and Customs (HMRC) tax collection raise concerns about the new Real Time Information (RTI) system.
RTI is a major change to the pay as you earn (PAYE) system. It requires employers to provide HMRC with PAYE information when payments are made, rather than after the end of the tax year.
RTI is important for the introduction of Universal Credit (UC) because it potentially means fewer delays in paying correct benefits when someone on UC does any work.
The Public Accounts Committee's concerns are that the system is not totally fail safe, which could actually lead to benefit delays when claimants, who move onto UC, declare work.
“7. The lack of full disaster recovery arrangements in the RTI system means there is a risk that any system failure will delay or introduce errors in payments to Universal Credit claimants. The successful implementation of Universal Credit depends on HMRC working effectively with the Department for Work & Pensions, both because Universal Credit uses information transferred to it from RTI to calculate payments to claimants and because it will eventually replace tax credits. However, delays in receiving information from RTI, or any system failures, are likely to affect payments to individual claimants, and RTI currently lacks full disaster recovery arrangements.”
The Committee recommends that
“HMRC must undertake work necessary to improve the provision for disaster recovery within the RTI system to ensure that correct payments to claimants will continue in the event of a system failure.”
Download the The Public Accounts Committee - Thirty-Fourth Report on HMRC Tax Collection: Annual Report & Accounts 2012-13.
For more on UC see our Factsheet F55 - universal credit.