HM Revenue & Customs is one of the brightest government departments with a reputation for utilising IT in positive ways. Having met department representatives recently at a senior level about Real Time Information (RTI), they impressed me. However, three areas cause concern:

1. The amount of non-payroll information demanded through RTI
2. A single view of technology that has yet to recognise how technology has changed for many
3. The timing and speed at which organisations can change their systems through IT providers.

As with all idealistic schemes, the principle is fine. VAT, for example, has now been transferred to electronic submission successfully. RTI supporters say, then, it’s a natural development to move to centralised deductions. However, as fine as the principle is, the business impact of introducing RTI is still potentially onerous and expensive.

Mandated
When I asked HMRC if it had done cost benefit analyses for employers or return on investment (ROI) modelling for business, it was inclined to use the word ‘mandated’. This attitude is reflected in the type and quantity of information needed. The information required in the first consultation document for the RTI return included 100 separate items. However, this is currently around 120, and growing! And the nature of items included will have the effect of ensuring that the HR and payroll systems will need to be far more closely integrated, with huge organisational ramifications.

More importantly, some areas of technology have moved on from the initial assumptions held at HMRC. We now have a plethora of other ways that organisations run HR and payroll functions, including cloud computing for example. Outsourced payrolls too, used by so many, will now need to get closer to internal HR.

Out of the blue, BACS has been decided upon as the only system for information transfer but we believe this might have to change, as EDI will rear its head to nullify the risk of having just one system. Though none of these factors have been thought through properly at all.

Time is short
It’s the timescales that make this so scary. Large employers are ‘mandated’ (that word again) to comply by January 2013, medium-sized organisations by April and SMEs August that year.

If one looks at users of large systems such as PeopleSoft, Oracle or SAP there could be over 100,000 employees in multiple locations being paid with information from numerous HR systems! To change this is time is very tight.

So within super-tight timescales, organisations’ IT suppliers have to specify system changes, although these can’t happen until HMRC finalises its specification. Once that’s agreed suppliers have to rewrite large chunks of internal systems – which might take 12 months! The main IT supplier companies don’t just do HR and payroll, and are not just concerned with the UK – their priorities are global.

Add to this that they are unlikely to make any revenue from RTI work as the forced changes are probably covered by existing user agreements, and you start to see just how worryingly tight timescales are. These IT suppliers might be doing RTI work for every other UK organisation, and have resource issues when it comes to your organisation!