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HMRC has announced that it will stagger the introduction of RTI penalties for two reasons: fixing glitches in HMRC’s own systems and to give employers who are experiencing difficulty in reverting to the new system a window for improvement.

What is RTI?

Launched in April 2013, RTI represents the biggest change to PAYE since it was introduced in 1944: where previously employers paid PAYE due to HMRC on account but only declared and reported their PAYE at the year-end with a P35 return, with the introduction of RTI, all UK employers (and pension providers) are required to notify HMRC of their PAYE liability at the time or before they make payment to their employees. Information is collated and sent to HMRC via the Government Gateway.

HMRC new timetable for real time information penalties

Why has government made this change?

Mainly, the change has come about in order that HMRC (using RTI) and the Department for Work and Pensions (DWP) Universal Credit system (which brings together means-tested in and out-of-work benefits) will be compatible.

What’s happening with it?

The new automatic in-year PAYE penalties for late filing and late payments and in-year interest (charged on tax and NICs that are paid late during the year) were due to start from 6 April 2014, but as some employers were still learning and HMRC acknowledge that it has improvements to make to its systems, the start of the new in-year late filing and payment penalties will now be staggered in order to give employers more time to adapt RTI. The new timetable will be:

  • April 2014: in-year interest on any in-year payments not made by the due date;
  • October 2014: automatic in-year late filing penalties;
  • April 2015: automatic in-year late payment penalties.

Please contact your account manager with any questions you may have relating to RTI.

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