Penalties for the new RTI PAYE scheme will be introduced from 6th October 2014, so it is crucial that you ensure your payroll affairs are up to date and you have a robust system to prevent mistakes. The penalties will be due if you are late with your monthly RTI report, known as a Full Payment Submission (FPS), which should be filed on or before the date you pay your employees.

You may also be fined if you do not tell HMRC why your submission is legitimately late or if HMRC have not received the number of submissions from you that they are expecting. If you have not made any payments during the tax month, you must submit a nil Employer Payment Summary (EPS) by the 19th of the following tax month.

Penalties will be issued for each tax month that was not filed on time, although in the case of weekly paid employees there will be a maximum of one penalty each tax month, even if two or more weeks are filed late during that month.

You will be let off the first month that you file late, so the maximum number of penalties a company can incur during the year is 11. However, if a return is outstanding for 3 months or more HMRC may charge interest of 5% of the tax and National Insurance due for the month paid late. They state that this will only be applied to the most “serious and persistent failures”.

The late filing penalty is based on the number of employees within your PAYE scheme as shown in the below table.

PAYE RTI Penalty Table June 2014

We can help you manage your PAYE scheme and keep up to date with your reporting responsibilities. Get in touch if you would like to discuss how we can support your business and remove the stress from being an employer.