HMRC is Hitting Hard on RTI Penalties

Two types of penalty: From April 6th 2014

      1. Submitting Full Payment Submission (FPS) late up to 5% of the Tax and NIC shown on overdue report.
      2. Making errors on FPS (re-running payroll)

Although HMRC are not applying these penalties for this year, if the FPS is late or incorrect there will be a black mark against your name. Please bear this in mind for this year.

We will advise that when asking us to re-run your payroll, this will incur penalties.

We HAVE to submit the FPS before, or on the day, that you are paying yourself or staff.
HMRC will be checking the dates, and if the date on the FPS is a non-banking day, you will be at greater risk of scrutiny by them.

CLICK HERE – For the HMRC Government Guidelines

Late Returns for 2014-15 Onwards

New late filing penalties will apply to returns due from employers for the tax year 2014-15 onwards. Having listened to customer feedback, HMRC is deferring the start of these penalties to give HMRC and employers more time to adapt to reporting in real time. They will now start from 6 October 2014. To avoid late filing penalties, you must make sure all submissions due are fully up to date by 5 October 2014.

Where payment information is not received as expected on an FPS (Full Payment Submission), or you haven’t told HMRC that no employees have been paid in a tax period by sending an EPS (Employer Payment Summary), late filing penalties will apply. These rules apply to each PAYE scheme, rather than each employer. So, if you operate more than one PAYE scheme you need to make sure that the FPS for each individual PAYE scheme reference is submitted on time or, where there were no payments made to any employees for a particular scheme for a tax period, you told HMRC by sending an EPS.

New, automated in-year late payment penalties will start from April 2015. In the meantime, HMRC will continue to charge late payment penalties – on a risk-assessed basis – on payments due from employers for the tax year 2014-15 onwards. You can find out more about late payment penalties in the guide ‘PAYE/National Insurance late payment penalties’.

Penalty charges for late returns and how they will apply.

In addition to where submissions do not appear to have been filed by the due date, a late filing penalty for a month may be issued where one of the following applies:

  • payment information is not received as expected on an FPS
  • you haven’t told HMRC that no employees have been paid by sending an EPS

However, no penalty will arise for the first month in each tax year where there is a filing default. This means there are a maximum number of 11 fixed penalties per tax year that can be charged for filing failures.

New employers will not be issued with a penalty if their first FPS is received within 30 days of making their first payment to an employee. But after that, normal penalties rules will apply if an FPS is filed late.

The size of the late filing penalties depends on the number of employees within the PAYE scheme.

HMRC will use the latest information available to determine the number of employees, and the size of the filing penalty for each period where a return is late.