PAYE - PENALTIES - 31.08.2017

Avoiding RTI penalties

HMRC has reviewed its approach to late RTI reports ahead of the first round of penalty notices. It says it will continue to take a risk-based approach. What does this mean for employers?

2017/18 penalties. In September 2017 HMRC will issue the first round of penalty notices to employers that submitted late RTI reports, or failed to submit reports when HMRC expected them. Penalties are a minimum of £100 for each month that a full payment summary (FPS) report is late, except for the first late report for which no penalty is charged (see The next step ).

No concession. Until 6 April 2017 HMRC operated a concession, the effect of which was to not charge a penalty where an FPS was up to three days late. An FPS is required on or before the day on which you pay one or more of your employees, unless one of the exceptions applies (see The next step ). Even though the three-day concession no longer applies it still figures in HMRC’s considerations when deciding whether to charge a penalty.

Risk based. In August 2017 HMRC said that if you submit an FPS that’s no more than three days late, and “there is no pattern of persistent late filing” it won’t charge a penalty. In other words, if your past record shows that you’ve submitted one or more FPSs late without a proper excuse HMRC is more likely to fine you the next time you’re late.

Tip 1. If you have a valid excuse, e.g. an IT failure, which caused you to submit a late FPS, notify HMRC even if the late report doesn’t trigger a penalty because it’s your first offence. Tip 2. Equally, if you’ve forgotten to indicate in your FPS that the report is late, but is covered by an exception, make sure you correct the report.

Taking these steps will help maintain a good record with HMRC so that it doesn’t treat you as a high-risk case when deciding if a penalty should be charged.

HMRC won’t issue a penalty for a late RTI report if it’s no more than three days late and you have an otherwise good record. To help maintain one always notify HMRC if you have a reasonable excuse for being late.

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