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Avoid Late RTI Penalties

By Simon Palmer


From 6th October 2014 HMRC will be issuing PAYE real-time (RTI) penalties to those who send late RTI reports – so make sure you are in the know and avoid any unwanted fines.

Did you know that this is the largest change to the PAYE system since its introduction back in 1944?

Real Time Information (RTI) for PAYE has been designed to improve the operation of the current PAYE system. As we see people changing jobs more frequently, or have multiple employments or pensions, keeping up to date with the relevant information and data becomes more difficult. The new automated scheme aims to reduce administrative burdens on businesses across the country as HMRC predict a reduction of approximately £300million a year from 2014-15. HMRC further benefit as they are able to keep more accurate records as employers and pension providers send relevant information more frequently.

What Do I Need To Do?

You must ensure that you submit a full payment submission (FPS) each time you pay an employee. It’s that simple! As long as you file this report before or on the date the employee is paid, you’ll avoid the risk of an unwelcomed penalty.

Don’t forget that this includes submitting an Employer Payment Summary (EPS) when employees are being paid over a given period.

How Much Could I Face Paying?

If you fail to present the FPS on time HMRC will issue you a fine correlating to the number of employees currently on your employers’ payroll – this can range from a minimum of £100 to a maximum of £400.

Any penalties you acquire will be issued after the end of each quarter you then have 30 days to pay. Failing to pay your penalties within the 30 days will result in yet more consequences resulting in an additional fine of 5% of the PAYE/CIS tax and National Insurance.

Am I Affected By The Change?

In a word, yes. But possibly not just yet.

Not all companies are affected immediately by the introduction of the new penalty scheme as HMRC announced plans to introduce the system in stages. You should have received a notification throughout September stating when the start date is for your business.

Initially HMRC stated that the rule would not apply to employers with fewer than 9 staff on their payroll until 5th April 2015. However, under recently announced revisions employers with fewer than 50 employees are now exempt until the end of March 2015.

Essentially this gives smaller employers, who HMRC say are experiencing more problems with the implementation of RTI, more time to adjust and update their systems. Ruth Own, HMRC Direction General for Personal Tax stated that “we know from experience of rolling out 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 system and enhance our guidance and customer support as needed.”

More Information and Help

For help and information concerning changes to RTI for PAYE contact the team at Qtac Payroll on 0117 9353500

Published November 2014