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Real Time Information (RTI): The Pain of Penalties

Real Time Information, or RTI – are you on top of it? By 2016, every employer must make a Full Payment Submission (FPS) to HMRC each time an employee is paid. If no employees have been paid in a tax month, and therefore there is no FPS to send to HMRC, an Employer Payment Summary (EPS) must be submitted. No FPS or EPS = a penalty. 

Important Dates

  • October 2014, you will be fined automatically for in-year late filing;
  • April 2015, automatic in-year late payment penalties apply (filing and payments must be made in real time);
  • April 2016, reporting rules exemption for "micro-employers" (9 employees or less) ceases.

Penalties for non-filing of PAYE and late payments

Late payment penalties apply to monthly, quarterly and annual periods of PAYE starting on or after 6 April. Penalties can be made up of a number of items and be simultaneously applied. That means you could owe a failure to pay penalty, plus a penalty for late payments, plus interest!

There is no penalty if only one PAYE amount is late in a tax year unless that payment is over six months late. The penalty owed depends on how much is late and how many times your payments are late in a tax year. So, discounting the first late payment that will not be charged:

  • Between 1 and 3 late payments: 1% of the total amount late in that tax year;
  • Between 4 and 6 late payments: 2%;
  • Between 7 and 9 late payments: 3%;
  • For 10 and more 4%.

Penalties for errors and adjustments to PAYE

The penalty date varies according to the type of payment.

From April 2015, HMRC apply automatic in-year penalties. A tolerance of £100 applies (the difference between what is reported and the payment). Determinations, assessments, amendments and/or corrections to returns are assessed from the "penalty date": 30 days after the due date. This means that you could end up paying:

  • 5% penalty, if not paid within 30 days of the due date;
  • Another 5% penalty, if not paid within 6 months of the due date;
  • Another 5% penalty, if not paid within 12 months of the due date.

Remember, that all the penalties can be applied at the same time.

Do not take chances with RTI, contact your account manager with any concerns; delegate payroll to a professional; definitely take our timely advice and get on top of your Payroll obligations today!

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