RTI D-Day Postponed

Contractors given another 5 month penalty reprieve

Real Time Information (RTI) penalties for late filed PAYE returns are to be introduced from 6th October but the good news is that this won’t apply to contractors. Only those businesses that employ 50 or more people will be affected whilst ‘smaller’ businesses have another 5 months stay of execution and won’t be bothered with fines until 6th March 2015.

This is the latest in a number of delays in the implementation of penalties since the imposition of RTI in October 2013.

Generic Notification Service (GNS)

Up until now, to help employers avoid future penalties, HMRC has sent GNS messages to employers. From October, an employer receiving a non-filing or late filing GNS message is likely to have filed a submission late or not at all, and therefore may well have incurred a penalty.

Penalty notices and new online appeals

Penalty notices will be issued by HMRC each quarter at the end of July, October, January and April. These notices will show the size of penalty due for any filing failures that arose in each quarter.

Employers will have a right of appeal if they think the penalty is incorrect or have a reasonable excuse for the failure. Appeals can be made electronically by selecting the ‘Appeal a Penalty’ link from the employers PAYE online account.

Explaining the rationale behind stalling RTI penalties for smaller businesses, Ruth Owen, HMRC director-general for personal tax, said, “We know from our experience of rolling out RTI that to ensure a smooth transition for our customers it’s best to introduce changes in stages. This will allow us to update our systems and enhance our guidance and customer support as needed. We know that those who have had most difficulty adjusting to real-time reporting have been small businesses, so this staged approach means that they have a little more time to comply with the new arrangements before facing a penalty…………………We believe this is the best approach for HMRC and our customers, as we all get used to the new in-year penalties.”