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RTI could lead to surge in tax tribunals

October 29, 2012


A High Court ruling has cleared the way for HMRC to claim several months’ worth of penalty fines from an employer, who argued he was not aware of the fines accruing.

The new PAYE reporting obligations for employers created by RTI could result in tax tribunal cases addressing RTI penalties becoming more widespread.

Steve Wade, a director at KPMG, said the case has ‘relevancy’ when HMRC’s PAYE Real Time Information reporting obligations are introduced for employers in April 2013.

“I imagine there will be lots of referrals on penalties under RTI,” he said. “It’s likely we’re going to get more tribunal hearings, and if the courts aren’t prepared to deal with them, they could get swamped.”

Wade says that there should be a reasonable regime for charging penalties. “Perhaps the Revenue should show some flexibility towards some individuals who find it particularly difficult to meet the requirements,” he said.

“But the main thing is to get prepared. There isn’t particularly long left for payroll managers to familiarise themselves with the new system, and for the vast majority, it’s their responsibility, and these changes need to be recognised, fast.”

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