Pay As You Earn

July 29, 2014 By SGW Payroll | Payroll

HMRC will introduce in-year penalties for failing to file PAYE submissions on time from 6th October 2014. You should therefore make sure that all submissions due for all of your PAYE schemes are fully up to date by 5th October 2014.

When will HMRC raise a filing penalty?

The HMRC will apply penalties:

a.) where a Full Payment Submission (FBS) has not been filed on or before the date you paid your employees, or where you have not told us why the submission is legitimately late by using the late reporting reason field.

b.) where they have not received the expected number of submissions from you. These rules apply to each PAYE scheme, rather than each employer.

How do I avoid incurring a late filing penalty?

You must submit an FPS each time you make a payment to an employee, on or before the date that you pay them.

If you don’t need to send the HMRC a FPS because you did not pay any employees in a tax month, it is important that you tell the HMRC by sending a nil Employer Payment Summary (EPS) by the 19th of the following tax month. Otherwise, it is likely that they will assume that you have missed a submission and will therefore issue a late filing penalty, which you will have to appeal.

To help get your PAYE up-to-date and avoid future penalties, you should take note of any late and non-filing electronic Generic Notification Service (GNS) warning messages which the HMRC can send to help you get your PAYE affairs up-to-date.

How will HMRC charge penalties?

They will charge one penalty for each tax month that you failed to file on time. So, for example, if a weekly filer makes two (or more) returns late within a tax month, they will only charge one penalty.

They will not charge a penalty for the first month in each tax year where you failed to file on time. So they can charge a maximum of 11 fixed penalties for late filing in a tax year.

They will not issue a penalty to a new employer if their first FPS is received within 30 days of making the first payment to their employee(s). But after that, normal penalties rules will apply if there is a failure to file on time.

Employers with nine or fewer employees and who meet certain conditions can take advantage of a relaxation for 2014-15 and 2015-16 .

The size of the late filing penalties depends on the number of employees within the PAYE scheme.

Where a return is late for three months or more the HMRC may charge a further penalty of 5% of the tax/NICs that would have been paid if the information it provides had been sent on time. The HMRC will apply this penalty only for the most serious and persistent of failures.

To find out further information including the below please click here

  • When and how will the HMRC tell me I’ve incurred a penalty?
  • What is the deadline for paying a penalty
  • Appeal- What to do if you disagree with a penalty
  • What are the reasons I can appeal
  • How do I make an appeal?



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