Late Submission Penalties under RTI
In 2013, HMRC’s introduced Real Time Information which meant that all employers are required to file a Final Payment Submission (FPS) on or before each pay day, regardless of the payroll frequency. It provides HMRC and DWP with up to date information on employees’ personal details, pay and tax information and will assist with the implementation of the Universal Credit Scheme.
Penalties for employers with more than 50 employees were issued from October 2014, but smaller employers could receive penalties from March 2015, if the FPS is not sent on time. Micro employers, those with less than 9 employees, are exempt from penalties until April 2016, allowing them more time to change and adapt to the process. If an employer has more than one PAYE scheme, employers can be charged penalties for each one.
The fines can be quite substantial and are scaled on the number of employees in the company:
1-9 ee’s £100/month
10-49 ee’s £200/month
50-249 ee’s £300/month
250+ ee’s £400/month
Submissions which are over 3 months late could attract an additional 5% charge of the tax and NIC which should have been reported.
If there is nothing to report, employers should file an Employer Payment Summary (EPS) with HMRC to avoid unnecessary demands being made and appeals to be launched.
Penalties will be issued quarterly in July, October, January and April and interest will be charged after 30 days of the issued notice. To avoid these, simply ensure that your FPS or EPS are made to HMRC on time.
For more information, please contact Tracey Simpson.