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Real Time Information submissions – no more automatic penalties

Posted by Wellden User
In June, HMRC issued the first in-year notices to employers with fewer than 50 employees who missed the deadline for sending PAYE information to HMRC.

Previously, PAYE late filing penalties only applied if the end of year return was late. However, under Real Time Information PAYE returns are now required ‘in year’ (generally at least monthly) and as a result tax law has changed to allow HMRC to charge automatic penalties for the late filing of these in year PAYE returns.

The new regime started on 6 October 2014 for employers with 50 or more employees with smaller employers being liable for the penalty from 6 March 2015. An employer who, during a tax month, fails to make a return on or before the filing date is liable to a penalty as follows:

  • 1-9 employees – £100
  • 10-49 employees – £200
  • 50-249 employees – £300
  • 250 or more employees – £400

However, the automatic nature of the penalties is not in line with the likely direction of HMRC’s general approach to many of its penalties, as outlined in a discussion document which it issued earlier this year. Rather than issue late filing penalties automatically when a deadline is missed, HMRC will take a more proportionate approach and concentrate on the more serious defaults. A more targeted approach means HMRC can focus ‘on those determined to bend or break the rules’.

This new approach will apply to all employers but HMRC will review the new approach by April 2016.

Please note, the deadlines for sending PAYE information stay the same, including the requirement to send PAYE information on or before the time that employees are actually paid or due to be paid. So it is important to ensure that PAYE matters are completed on a timely basis and we are happy to assist in this area.

Our payroll team can also assist you with setting-up your company’s auto-enrolment scheme. Contact us today for more information.

HMRC relaxes PAYE late filing penalties

Posted by Wellden User

HMRC will begin relaxing automatic late filing penalties for people who send PAYE information late, officials have indicated.

The revenue said it would take a ‘proportionate approach’ instead of issuing automatic penalties in the event that an employer reports PAYE information late.

Investigations will now be concentrated on ‘the more serious defaults on a risk-assessed basis’. The move will allow HMRC to focus on serious cases of non-compliance, and to invest resources in educating employers on compliance issues.

The decision reflects the conclusions of a policy document published by HMRC in February 2015. The report argues that small automated penalties are costly and resource intensive for the revenue to pursue, and detract from its ability to pursue serious compliance failures.

The news comes after a leaked HMRC memo revealed that the revenue would no longer be investigating each individual late filing of self-assessment returns. Officials will now waive the £100 late filing penalty if people provided a ‘reasonable excuse’ on appeal.

Colin Ben-Nathan, chairman of the Chartered Institute of Taxation’s Employment Taxes Sub-Committee, welcomed the announcement:

“The requirement on employers to send PAYE information in ‘real time’ has proved difficult for some employers to comply with, especially the smallest and those whose employees have unpredictable working hours. It has imposed new and sometimes onerous obligations on employers.

“HMRC are right to have taken a pragmatic approach so far to the levying of penalties, initially not imposing them at all for smaller firms and now promising to concentrate on the most serious defaults.”

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