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HMRC delays penalty regime for RTI after teething troubles
by Susie Hughes at 11:42 19/02/14 (News on Business)
HM Revenue and Customs has announced that it will stagger the start of a new penalty system for late payment and filing penalties in relation to PAYE Real Time Information (RTI), to give HMRC and employers more time to adapt to reporting in real time.
The new automatic in-year PAYE penalties for late filing and late payment and in-year interest (charged on tax and National Insurance Contributions that are paid late during the year), were due to start from April 6 2014.

However, HMRC has recognised that RTI is a big change and some employers are continuing to learn. HMRC says that having listened to customer feedback, it has decided to stagger the start of the new in-year late filing and payment penalties to give employers more time to adapt to reporting in real time.

HMRC’s Director General for Personal Tax, Ruth Owen, said: “The introduction of RTI is going extremely well for the majority of employers but there are still some who need a bit of time to adapt fully to the changes. This additional time will give us the opportunity to ensure that improvements to our internal systems are working, to learn from them and to provide better customer support to employers who need more time to adapt.”

The new penalties will now be introduced in stages:

  • April 2014; in-year interest on any in-year payment not made by the due date
  • October 2014: automatic in-year late filing penalties
  • April 2015: automatic in-year late payment penalties

At the same time, HMRC is continuing to improve its systems and guidance.

The move was welcomed by accounting practitioners in the field. Tina Riches, from accountancy group Smith and Williamson, said: "Employers and their agents will welcome the real time relief brought by HMRC’s pragmatic decision to delay the introduction of new penalties around reporting PAYE in real time.

“Thousands of employers have been affected by problems in the processing of online returns sent to HMRC, which had resulted in real time problems. Some had HMRC debt collectors arriving on their doorsteps, even when all their PAYE had been paid. To load penalties onto a system which has not yet bedded down would have increased their misery and distress.

“Staggering the introduction of the penalties is a sensible way forward and I would urge the Government to keep this under review in the lead up to both October 2014 and April 2015, the new planned dates to introduce the different penalties."

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Susie Hughes © Shout99 2014

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