HMRC eFiling, “a bit of a disaster” says BASDA Chairman

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November 2, 2007 by mike

“A bit of a disaster” is how the new HM Revenue & Customs (HMRC) Payroll eFiling programme was described, according to Dennis Keeling the outgoing BASDA Chairman, in a recent YouTube video.

In the video, Dennis Keeling is interviewed by PayPerShop presenting a highly critical analysis of HMRC’s new amendments to Payroll eFiling.

Dennis Keeling, BASDA Chairman (speaking on Payroll eFiling at SoftWorld)

He comments on the new HMRC Payroll eFiling programme calling it, “a bit of a disaster” citing that now the “Government has run out of money” for implementing the Carter 1 recommendations (specifically for end of year filing) falls to the software vendors to ensure that their products are compliant with the Carter “Review of HMRC Online Services” report.

Dennis goes on to say that come next April, all supporting software will need to be rewritten in order to support the Carter 2 (mid year filing) recommendations as well as the older Carter 1 recommendations, since our Government wants to run at least parts of both at the same time.

This means that if you use software to produce your P45/P46 (and you have to file online by law by April 2008 if you have more than than 50 employees) substantial parts of it will need to be rewritten by April 1st 2008 in order to support the new recommendations, but still keep the existing system for filing the payroll year end returns.

But I bet your current payroll software package won’t be ready on April 1st…

“Learning from lessons of the past”
Earlier this year, HM Revenue & Customs introduced a whole new taxation scheme for the Construction Industry, called the Construction Industry Scheme. If you’re a regular reader of my blog, you’ll probably know all about the failings of this scheme by now. If you don’t - please select the “Construction (new CIS)” category and catch up

This scheme was introduced on April 6th with absolutely no live black box testing. In other words, a whole new taxation scheme went live - with supporting software infrastructure and software products from third party software houses - all without adequate testing. The first time monthly returns were tested with real data was the day when a real monthly return was submitted. Nobody knew what might happen if the Gateway servers were innundated with requests (they crashed, of course), or were sent real life data which caused them to congest. Of course nobody knew, because there was absolutely zero live testing. No beta testing. No testing, period.

This lead to a long period of confusion by customers, HMRC with their head in the sand and software developers working all hours to ensure that customers were well supported. Meanwhile, presumably as a way to appease the electorate, HMRC promise not to fine anyone whilst the new software system problems are worked out. It turns out that contractors could still lose their gross payment status if not compliant during this time (such as if a monthly return couldn’t be submitted online in time) - even if it wasn’t their fault.

In short, it was a costly disaster for the industry and the software developers. Presumably this cost was not incurred by HM Revenue & Customs, who refuse to provide adequate testing facilities for the software requirements that they impose. Dear reader, do you think that HMRC’s own basic software offerings are untested like this?

A quick word to HMRC: A simple solution to resolving this mess would be to offer a proper test service for payroll testing, in a copy of the live environment. This would allow all software developers to be confident when releasing software to customers that it has at least been tested before the 1st April.

“When you consider that some very large companies are now going to be forced to file P45/P46 electronically, you’d have expected that [they] would have tested their software before going live.”

“To leave it until the last minute just isn’t the way you should do it”
- Dennis Keeling, BASDA Chairman.

If nothing is done (and I suspect this is the case), come 1st April there may be vast problems which by their nature are unforeseen. Going by last April with new CIS, I would expect to see a good mix of technical failure in vendor software, misunderstandings by customers, HMRC software failings, Government Gateway collapse, and a confusing PR backpedalling by HMRC and who knows what else? Perhaps the air conditioning for the HMRC servers will break like they did this year and all the machines will switch off?

My advice to anyone using Payroll software would be to check their software support license or maintenance agreement. Your software vendor is most probably already acutely aware of the Carter review implications and from past experience will likely schedule a “patch”/”fix” or “update” to their software shortly after 1st April as support tickets start to flood in. Remember, this new eFiling mechanism won’t be tested and there are no plans by HMRC to allow software vendors to test in live either!

If you are not covered by a support or maintenance agreement, you might find that the software you use will not appear to function correctly for online filing from April 1st 2008. In which case, I advise getting the arrangements for software support in place, in time for April 1st. Also make sure you know how to apply any updates from your software vendor. It goes without saying that software from us - is automatically updated with little or no effort from the customer.

Make sure that your software license entitles you to updates and fixes next April.

I’ll give the last word to Dennis, “This could be one of the worst disasters we’ve had in a long time”. And I agree.