Employers’ over-reliance on payroll providers threatens success of RTI implementation, says PwC survey

Too many employers are relying on their payroll providers to support their real time information (RTI) compliance, raising the risk that many won’t be ready in time for the April deadline. This is according to a PwC survey of nearly 200 HR and payroll professionals.

Virtually all employers (99%) surveyed said they will need some level of support to ensure they are ready to start reporting PAYE information to HMRC in real time. But worryingly, more than half (52%) of respondents said they expect their payroll provider to supply the support required for RTI. This is despite around one in four (24%) companies believing that their payroll provider has not yet finalised their RTI compliant software. And over half (53%) are unclear whether their payroll provider has any RTI compliant software.

John Harding, human resources director at PwC, said:

“RTI is about more than simply the payroll software; the quality of the employee data and the processes for collecting and maintaining that are critical to compliance. Our survey reveals a worrying mismatch between what employers expect from their payroll providers for RTI implementation and the resources available. The majority of employers are relying on their payroll provider for support despite concerns that they have not yet finalised their compliant software.

“With more than half of employers looking to their payroll provider as their first port of call for RTI enquiries, there is a real risk that the payroll industry will not have the capacity to fully support all businesses. There is a danger that over reliance on payroll providers may mean that many businesses may struggle to be ready for implementation in April.

“Payroll providers need to make it clear to their clients the extent of their capacity to provide support and the associated costs. Employers should not underestimate the challenge of meeting the requirements of both RTI and auto-enrolment by April.”
The survey also revealed that employers are most concerned about the need for system changes and interfaces under RTI, with 34% of respondents saying this is their biggest challenge. However, data collection, storage and transmission, and resource constraints followed close behind with 24% and 22% of companies, respectively, highlighting these as their main concerns.

John Harding, human resources director at PwC, said:

“With less than three months to go until the majority of employers go live it is vital they address their biggest challenges at the earliest opportunity. Our survey reveals that companies with internationally mobile employees will need to review their payroll operations as a priority due to the lack of clear guidance in this area. HMRC have recently begun to communicate to employers their concerns around RTI and internationally mobile employees, but over half of employers surveyed were unsure of how the changes required under RTI would impact their internationally mobile employees.”