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Real Time Information (RTI) penalty update

Author: Mark Thomas
Date: 1st April 2014
Tags: RTI

With RTI now approaching the end of the first full year in operation, HMRC have acknowledged again that it has not gone as smoothly as hoped for some employers and re-reviewed the penalty position.

With the advent of RTI last year came the burden of employers having to learn a complete new way of reporting their payroll calculations, etc to HMRC and meant having to buy software or use the HMRC system.  This involved an investment in time and money by employers both of which are in short supply for many small businesses.

After an initial short period of grace, HMRC then intended to roll out their new RTI penalty regime which effectively gave them an opportunity to penalise any employer for not dealing with their RTI obligations at the correct time.  However, HMRC recognised at a very early stage that the burden upon employers from changing their existing payroll system to an RTI based system was causing more problems than initially thought.  Accordingly, HMRC delayed the introduction of the new penalty based structure with a view to introducing it with effect from 06/04/14.

Following pressure from various accounting bodies and payroll agents, HMRC have now recognised that many employers are still struggling to get to grips with RTI and have therefore agreed to review once again the introduction of the new penalty regime.  Accordingly, the latest position relating to penalities is now as follows:

From April 2014, interest will be payable on in-year payments of PAYE and NICs not made by the due date;

In October 2014, in-year automated penalties for the failure to file RTI reports on time will come into force;

In April 2015, in-year automated penalties for late payment of PAYE and NICs due will be introduced.

We hope that you found this article useful but please contact us if you want to discuss it further.

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