Real Time Information – penalties
The introduction of major changes to the way PAYE information is collected, began with the introduction of the Real Time Information (RTI) system in April 2013. The system involves employers sending HMRC information about tax and other deductions from employees’ pay when the employee is paid, rather than at the end of the year as at present. More than 99% of PAYE records are currently being reported in real time.
At the time that RTI was introduced, HMRC announced that there would be no penalties if in-year Full Payment Submissions (FPS) were sent in late, until April 2014. HMRC has now announced that following feedback they have decided to stagger the start of the new in-year late filing and payment penalties to give employers more time to adapt to reporting in real time.
The new timetable will be:
- April 2014 – in-year interest on any in-year payments not made by the due date
- October 2014 – automatic in-year late filing penalties
- April 2015 – automatic in-year late payment penalties
HMRC has begun emailing employees who should have already started reporting PAYE in real time. The emails follow earlier letters to employees and remind them that they may be subject to penalties if they do not act soon.
HMRC’s Director General for Personal Tax, Ruth Owen, said:
‘Over 99 per cent of PAYE records are being successfully reported in real time and the majority of businesses say they find the new system easy to use. So those who have not begun using the system should not stick their heads in the sand. They need to act now to ensure that they don’t get a penalty at the year end.’