Further to our article earlier this year on RTI penalties being phased in, the automatic ‘in-year’ late filing penalty will commence from 6 October 2014. To ensure a late filing penalty is not issued all filings due must be up to date as at 5 October 2014. Do not forget that if no employees have been paid in a tax period an EPS must be filed.
These rules apply to each PAYE scheme rather than each employer so an employer must ensure that all PAYE schemes submissions are up to date as at 5 October 2014 and filed on time thereafter. Update - there is now a Small Employer concession until March 2015 for employers with 49 employees or under.
Penalties will apply where submissions do not appear to have been filed by the due date, and may be issued where one of the following applies:
- payment information is not received as expected on an FPS
- HMRC has not been told that no employees have been paid by sending an EPS
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.
| Number of employees | Amount of the monthly filing penalty per PAYE scheme |
| 1 - 9 | £100 |
| 10 - 49 | £200 |
| 50 - 249 | £300 |
| 250 or more | £400 |
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.
Ordinarily, HMRC will send employers a filing penalty notice quarterly in July, October, January and April, where appropriate. These penalty notices show the amount of the filing penalty for each tax month identified in that quarter. For example, a penalty notice in July will show any filing penalties arising in the first quarter of the tax year - that is, month 1 (6 Apr to 5 May), month 2 (6 May to 5 June) and month 3 (6 June to 5 July). The first notices should be due in January 2015.
Where a return is late for three months or more and the information that it would have contained has not been provided on a later return, a further penalty may be charged. This additional penalty is set at 5% of the tax/NICs that should have been shown on the late return. This will be used for the most serious and persistent failures.
All penalties are due for payment 30 days following the date of the penalty notice. Penalties not paid on time will attract interest. If you disagree with the penalty, you have a right of appeal. Further information can be obtained here.
The next phase of the RTI penalty regime is scheduled for April 2015 when automatic ‘in-year’ late payment penalties will commence. We will detail these nearer the time.
Please contact us for further advice
