Employers face PAYE late filing penalties

Taking its information from the HMRC website, Intelligo reports that HMRC has now issued the first in-year penalties notices to employers, with less than 50 employees who missed the deadline for sending PAYE information back to HMRC. Rather than issue late filing penalties automatically when a deadline is missed, HHMRC will take a more proportionate approach and concentrate on the more serious defaults on a risk-assessed basis. This approach is in line with the suggested new direction of HMRC’s approach to penalties, outlined in the discussion document which was issued earlier this year.

Late reporting penalties already apply to employers with 50 or more employees, so this ‘risk-based’ approach will apply to submissions that were late from:

  • 6 March 2015 for employers with fewer than 50 employees, and
  • 6 January 2015 for employers with 50 or more employees.

HMRC will continue to issue risk-based penalties for the tax year 2015 to 2016 tax year. HMRC states they do ‘not want to charge penalties, but wants employers to report on time. It wants to help employers who are trying to do the right thing, rather than penalise them’.

This move to issuing risk-based late filing penalties also continues HMRC’s strategy of adapting its approach which will enable HMRC to concentrate more resources on the more serious failures to comply and to focus on educating employers about their filing obligations. It applies in addition to HMRC’s recent announcement that it will not be penalising minor delays of up to three days. HMRC will monitor both, and review by April 2016.

Even if employers do not get a penalty, they are required by law to file on time and if they do not may be charged a penalty on a future occasion. The deadlines for sending PAYE information stays the same, including the requirement to send PAYE information on or before the time that employees are paid or due to be paid.

Employers can appeal electronically using the Penalties and Appeals System (PAS) on HMRC Online. Employers who receive a late filing penalty notice for the tax year 2014 to 2015 quarter four but who filed within three days of the reporting deadline may appeal and should use reason code A.