From 6 October HMRC will begin issuing automated PAYE real-time transaction (RTI) penalties to companies sending late RTI reports.\u00a0<\/p>\n
The PAYE RTI represents a fundamental reform of Pay As You Earn, which required all UK employers to notify HMRC of their liability to PAYE.\u00a0 It is hoped that the new automated system will be easier for employers, as well as helping reduce the amount of reports issued late.\u00a0 The overhaul represents the largest change to the PAYE system since its introduction in 1944, and is part of the Government\u2019s commitment to the introduction of Universal Credit made in October 2013.<\/p>\n
HMRC declares the report to be late if it is paid on or before the date the employee is paid.\u00a0 Currently, there is no penalty fee for the first late RTI report after 5 October, but subsequent offences will result in a fine, the amount of which correlates to the number of employees on the employer\u2019s payroll.\u00a0 There is a minimum fine of \u00a3100 and a maximum of \u00a3400.\u00a0 If the fine remains outstanding after three months, a further penalty equal to 5% of the PAYE\/CIS tax and NI will be charged.\u00a0 RTI penalties will be posted to employers after the end of each quarter.<\/p>\n
Those believing penalties to be incorrectly issued can appeal through HMRC\u2019s website, but must do so immediately or else risk the HMRC earmarking some of their next PAYE payment to cover the fine.<\/p>\n
However, not all companies will be immediately affected, with HMRC announcing plans to introduce the system in stages.\u00a0 Initially, it was announced that the rule wouldn\u2019t apply to employers with fewer than nine staff on their payroll until 5 April 2015.\u00a0 However, HMRC recently revised this exemption to small employers with fewer than 50 employees, which will end in March 2015.<\/p>\n
Ruth Owen, HMRC Director General for Personal Tax, said: \u201cWe know from our experience of rolling out RTI that to ensure a smooth transition for our customers it\u2019s best to introduce changes in stages.\u00a0 This will allow us to update our systems and enhance our guidance and customer support as needed.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
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