1st January 2016

HMRC issues first in-year penalty notices

Revenue gets serious with RTI late filers

Shortly a number of businesses with fewer than 50 employees, who missed their deadline for sending PAYE information to HMRC, will receive their first in-year penalty notices.

Rather than an automatic penalty, where deadlines are missed, HMRC have suggested that a more proportionate approach has been taken and concentration is on the more serious defaults on a “risk-assessed” basis. It applies in addition to a recent HMRC announcement, which will be reviewed by April 2016, that it will not be penalising minor delays of up to three days.

Earlier this year HMRC outlined the general approach to penalties in their HMRC penalties: a discussion document along with HMRC's fresh approach to considering appeals against late filing penalties for Self Assessment.

This “risk-based” approach will apply to submissions that were late from:

  • 6 March 2015 for employers with fewer than 50 employees, and
  • January 2015 for employers with 50 or more employees.

HMRC will continue to issue “risk-based” penalties for the tax year 2015 to 2016 tax year.

The move to issuing “risk-based” late filing penalties continues HMRC's strategy of adapting its approach, where necessary, before moving to the next phase of implementation.

The approach is intended to better enable HMRC to concentrate more resources on the more serious failures to comply as well as focusing on educating employers about their filing obligations through targeted communications, webinars and Employer Bulletin articles.

There is a requirement, by law, to file on time and even if employers do not get a penalty at this time they may be charged a penalty on a future occasion. 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.

Employers can appeal electronically using the Penalties and Appeals System (PAS) on HMRC Online. Employers who receive a late filing penalty notice for tax year 2014 to 2015 quarter 4 but who filed within three days of the reporting deadline may appeal and should use reason code A as set out in the What happens if you don't report payroll information on time guidance.

Source - HMRC - Pay As You Earn (PAYE) late filing penalties

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