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RTI – Penalty charges for late returns

What happens if you don’t report payroll information on time? HMRC is working closely with employers, payroll providers and software developers to make it easy for employers to comply with operating PAYE in real time, and to make it part of their normal payroll processes.

You must submit a Full Payment Submission (FPS) each time you make a payment to an employee. The final FPS for an employee should be sent on or before their last pay day in the tax year and will be used to update the individuals’ tax, National Insurance contributions (NICs) and student loan deduction records.

If you do not pay any employees in a tax month, and therefore have no FPS to send to HMRC, you must notify HMRC – by sending an Employer Payment Summary (EPS) – by the 19th of the following tax month. This will make sure HMRC don’t wrongly issue a penalty because they were expecting an FPS from you.

New late filing penalties will apply to returns due from employers for the tax year 2014-15 onwards and these will now start from:

• 6 October 2014 for employers with 50 or more employees

• 6 March 2015 for employers with fewer than 50 employees

To avoid late filing penalties, you must make sure all submissions due are fully up to date by 5 October 2014.

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 not accept pressure of work or lack of information, as reasonable excuses for late filing.

For full and detailed information visit the HMRC website >>


One Response to “RTI – Penalty charges for late returns”

  1. Andy Hunt says:

    If I disagree with the penalty, do you have the right to appeal?

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