RTI late filing penalties
The vast majority of employers are now reporting their PAYE information in real time. Following the introduction of RTI in April 2013, it was decided to stagger the start of the in-year late filing and payment penalties to give employers more time to adapt to reporting in real time.
The new late filing penalty regime starts on 6 October 2014 for employers with more than 50 employees. There is an exemption for small employers until 5 March 2015. HMRC began charging interest on any in-year payments not made by the due date in April 2014.
The size of the late filing penalties depends on the number of employees within the PAYE scheme.
|Number of employees||Amount of the monthly filing penalty per PAYE scheme|
|1 to 9||£100|
|10 to 49||£200|
|50 to 249||£300|
|250 or more||£400|
There is an additional penalty of 5% of tax and NIC which should have been reported that is more than 3 months late. This penalty will be used for the most serious and persistent failures.
HMRC will issue penalty notices quarterly in July, October, January and April. These penalty notices will show the amount of the filing penalty for each tax month identified in that quarter. Employers who believe they have a reasonable excuse for sending a return late will be able to appeal using HMRC’s new, online appeals process for automated penalties.
Ruth Owen, HMRC Director-General for Personal Tax, said:
‘We know from our experience of rolling out of RTI that to ensure a smooth transition for our customers it’s best to introduce changes in stages. This will allow us to update our systems and enhance our guidance and customer support as needed. We know that those who have had most difficulty adjusting to real-time reporting have been small businesses, so this staged approach means they have a little more time to comply with the new arrangements before facing a penalty.’
It is especially important that all small businesses ensure that their filing processes are up-to-date in the run-up to March 2015.