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Respite for small employers as HMRC delays RTI late-filing penalties 10 September 2014

Small employers with 49 or fewer staff will not be issued with automated PAYE RTI late filing penalties until 6 March 2015, says HMRC.

However, those companies that employ 50 or more people will face penalties from 6 October 2014.

HMRC says it will send electronic messages to all employers to let them know when the penalties will apply to them, based on the number of employees shown in the Revenue’s records.

In the run up to March 2015, in addition to financial penalties, HMRC says it will examine “other ways” to encourage employers to comply with the rules, although it has given no indication as to what these could be.

The Chartered Institute of Taxation (CIOT) has hailed the announcement as a “positive step” in helping small business move onto the new PAYE reporting method, but says “wrinkles” remain in the overall system.

The CIOT says smaller employers need a longer period of time to adjust to PAYE and other administrative changes because they have very limited resources, most of which are geared to servicing their clients and customers.

Colin Ben-Nathan, chairman of the CIOT employment taxes sub-committee, said: “The Institute welcomes this delay until March 2015. However, we think HMRC still has work to do ensuring the accuracy of automated generic notification messages to employers.

“An improvement in the accuracy of the late filing, non-filing and late payment messages would not only reduce the volume of penalties issued in error by HMRC, but would also reduce the number of appeals that inevitably result from this.

“Additionally, we consider HMRC needs to do more to make speedier use of the RTI data it is receiving to improve the accuracy of PAYE deductions for employees and pensioners.”

 

 

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