Employers should be aware that automatic penalties will apply if their RTI submissions are not up-to-date by Sunday, 5 October 2014 - and thereafter kept up-to-date. These penalties will be in addition to the automatic interest charge which has applied to late payments since April this year. Penalties will be imposed:
- Where a Full Payment Submission (FPS) is filed late - that is to say, is not filed by the day the employees are paid or, if the employer qualifies for the concession for some employers with nine or fewer employees, by the last pay day in the tax month; and
- Where an employer fails to file a nil Employer Payment Summary (EPS) - for a month in which no payments to employees were made - by the 19th day of the following month (so by 19 October for the tax month to 5 October).
The monthly penalty will be £100 if the employer has less than ten employees; £200 if he has between ten and 49; £300 if he has between 50 and 249; and £400 if he has 250 employees or more. However, the first default each tax year will be ignored.
Penalty notices will only be issued every three months. It appears that the first penalty notices will be issued in October 2014, to cover any defaults for the current tax year that were not rectified by Sunday, 5 October.
Where a submission is three months late, HMRC will additionally be able to impose a 5% surcharge on the tax and National Insurance contributions payable. They say that this will be used ‘only for the most serious and persistent failures.’
From April next year, the screw will be tightened yet further, with the existing penalties for late payment of monthly or quarterly PAYE remittances being made automatic and applied in all cases. The penalty will be between 1% and 4% of the tax due, depending on how many times, in the tax year, the employer pays late.
HMRC has announced that the introduction of automatic penalties for late RTI submissions will be delayed another five months for small employers.
Under the revised timetable announced back in February, automatic penalties were due to start from 6 October. This date will still apply for companies that employ 50 or more people, but smaller companies will get an extra five months until the automated regime starts to bite from 6 March 2015.
The Revenue said it will send electronic messages to all employers shortly to let them know when the penalties will apply to them, based on the number of employees shown in the department’s records.