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HMRC sends second letter to non RTI compliant employers

September 5, 2013


HMRC is to write for a second time to employers who have not yet reported RTI. In a press release today, HMRC confirmed it will send these warning letters throughout September. The first reminder letter was sent to around 600,000 PAYE non-compliant schemes in June, as reported by  The press release reports that HMRC still have not received an RTI submission from around 167,000 schemes, although Ruth Owen, HMRC’s Director General of Personal Tax stated that over 85 per cent of employers are now reporting in real time.

The figure of 167,000 non-compliant PAYE schemes is a significant reduction from the 600,000 schemes reported in June, and this may be indicative of the number of schemes which had been unable to register as annual due to a system glitch which was preventing annual registration.

Both HMRC’s warning letter and their press release urge employers to act now in order to “avoid incurring penalties in the future”, and the letter warns that automatic penalties for late filing will apply in 2014-15. Employers must either begin making real time submissions or tell HMRC that they do not employ anyone in order to avoid further compliance measures.  The letter states that:

If you haven’t reported because you haven’t paid anyone at all, you need to let us know that you don’t owe HMRC any tax.  If your PAYE scheme is closed or is no longer operating, you also need to tell us.  This is important as it will stop HMRC incorrectly pursuing you for money.

HMRC’s implementation of RTI allows it to determine a specified charge for PAYE, which is in effect HMRC’s estimate of the PAYE it thinks is due from an employer, in the event that an employer does not report RTI. Under RTI the burden of responsibility to notify HMRC no tax is due falls on every business which has a PAYE scheme even where no liability to PAYE is being created.

Commenting on the HMRC letter in a web update to its members, the Chartered Institute of Payroll Professionals encouraged employers to call the Employer Helpline Tuesday to Thursday when it tends to be less busy if they need to tell HMRC about an inactive PAYE scheme.

According to their press release, HMRC believe that many of the PAYE schemes which have not yet begun reporting RTI could be closed as they have no employees attached to them.  However, the CIPP reminded agents and employers that some schemes which do not have employees linked to them are operated in order to allow for the reporting of expenses and benefits claims to HMRC.  In these cases, the employer must either send a nil EPS each month or request that HMRC change their scheme to annual, so they only have to send one nil EPS in a year.

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