With Real Time Information (RTI) being operated by most employers for over a year now, HMRC have announced that the penalty regime will be staggered for in-year late reporting.
When will penalties apply from?
Penalties for in-year late reporting of RTI will now apply from 6 October for employers with 50 or more employees and 6 March 2015 for employers with less than 50 employees.
HMRC have recognised that RTI is a big change, particularly for smaller employers, and that people need time to adapt to the new measures. This is a welcome announcement as, although 18 months on from the introduction of RTI for the first employers, the transition has not been smooth for many which has been further hampered by technical issues with HMRC systems.
What are the penalties?
The monthly penalty levied depends on the number of employees as follows.
| Number of Employees | Monthly Penalty |
| 1 - 9 | £100 |
| 10 - 49 | £200 |
| 50 - 249 | £300 |
| 250+ | £400 |
Penalties will be issued quarterly by HMRC with a payment deadline of 30 days following the notification; otherwise interest will start to accrue. Due to the delay in notification this could mean penalties are building up unbeknown to the employer for some time. Penalties will not be levied in the first month in which there is a late filing, however, so for the first quarterly period a maximum of two months penalties will be issued.
If a report is not filed after three months, there is an additional 5% penalty of the tax and national insurance which should have been reported. Additionally, if you operate more than one PAYE scheme, penalties can be levied on each.
If you do not agree with the penalty notice issued i.e. if you believe the amount is wrong, or you have a reasonable excuse for late reporting, it is possible to appeal to HMRC.
As well as the penalties detailed above, there are also penalties for inaccurate in-year information (already in effect) and late payment of PAYE (applying from April 2015).
Where we can help
If you would like advice on the general operation of your payroll, or if you have received a penalty notice which you are not sure is payable, we would be happy to assist. Hazlewoods operate with the latest payroll software and are a registered BACS bureau, so our team is well placed to answer any questions or concerns you may have.