PAYE RTI News
HMRC changes approach to PAYE penalty notification
June 6, 2014
In advance of the transition to in-year penalties for late and non-filing of PAYE returns from October 2014, HMRC has announced that it is changing the number of penalty notices it will issue to those employers who have not filed PAYE on time for the 2012/13 and 2013/14 tax years. This move is an attempt by HMRC to avoid confusion caused by the issue of updated penalty notices for an earlier default arriving at the same time as a new notice for an in-year default.
HMRC will not now issue further penalty notices for the 2012/13 year, the third of which was due to be sent at the end of this May, and will instead send the employer an updated notice when the outstanding return is actually received. This new notice will show the correct amount of penalty due. Employers with returns outstanding from the 2012 to 13 tax year will have already received two penalty notices, one in September 2013 and one in January 2014, and HMRC will continue to pursue the missing returns these notices relate to.
For the 2013/14 tax year, HMRC will shortly be writing to employers who have yet to file their final submission to warn them that they need to take immediate action in order to avoid any penalty that is due from building up further. A penalty notice will be sent to employers with outstanding 2013-14 returns in September, as has happened in previous years. Updated notices will be issued showing the correct penalty position upon receipt of the outstanding submission but no further reminder penalty notices will now be issued.
Penalties up to and including 2013 and 2014 are calculated on an escalating basis, depending on the amount of time the return is outstanding and the size of the employer. HMRC guidance on the penalty amount states that “The penalty will be £100 per 50 employees for each month or part month the return is outstanding from 20 May 2014 to 19 September 2014. So an employer with 50 or less employees where the return is still outstanding by 20 September will receive a penalty of £400.”
All employers who have yet to file PAYE returns for previous tax years are urged to do by HMRC as soon as possible, or to inform HMRC that there is no return to make, in order to prevent further build up of penalties.
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