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RTI penalties extended to small employers but with concession

by Susie Hughes at 08:28 12/03/15 (News on Business)

Penalties now apply to small businesses for late filing of PAYE submissions under the new Real Time Information (RTI) system. However the Revenue has confirmed that there will be a three-day grace period (for all employers) before the penalties are imposed.

The Chartered Institute of Taxation (CIOT) and the Low Incomes Tax Reform Group (LITRG) have welcomed this relaxation mitigating a burden which would have been felt particularly keenly by many of the smallest employers. Since October 2014, employers with 50 or more employees have been subject to late filing penalties if they send PAYE information to HMRC late. Although HMRC initially intended employers with fewer than 50 employees also to be subject to penalties from this date, an extension to March 6, 2015 was given to smaller employers who needed more time to adapt to the new system. Advertisement CIOT Tax Policy Director, Patrick Stevens, said: “Although there is no change to the actual filing deadline, which for the vast majority of employers still means a Full Payment Submission (FPS) should be filed on or before each time they pay their staff, this three day grace period is certainly a helpful concession. “This comes in addition to the rules which stipulate that brand new employers can send their first submission within 30 days of first paying an employee without incurring any penalties. In all cases, the first late submission of the year is ignored. It is also the case that micro employers (those with up to nine employees) who commenced payrolls before April 6, 2014, are essentially allowed to file monthly anyway until April 2016. “Further relaxations recently announced include HMRC continuing to review late payment penalties manually, instead of imposing them automatically (as intended from 6 April 2015) and employers no longer needing to complete a set of year-end questions on the final FPS of the year, which in an effort to simplify the process, are disbanded from 6 March 2015.” Smallest firms ITRG Technical Director, Robin Williamson, said: “All of these easements are to be welcomed. However, for many of the smallest employers, particularly ‘accidental employers’ - those who have taken on a personal assistant to help them with care or social needs – operating a payroll so that they can pay their employee and complying with all their other employer obligations can mean that there is still an awful lot to worry about. "Therefore we would urge HMRC to reassure those smallest businesses where the penalties burden will be more keenly felt by keeping these helpful concessions coming.” Tweet -- If you wish to comment on this article, please log in and use the Reply button below. Registering is free and easy - see 'Join Shout99'. - Susie Hughes © Shout99 2015

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