New RTI penalties
From 6 October 2014 employers with 50 or more employees will receive an automatic penalty of £300 or £400 if they file more than one RTI return late in the tax year. Smaller late filing penalties of £100 or £200 will apply to other employers (those with up to 49 employees) who file RTI returns late from 6 March 2015.
HMRC will warn you that an RTI return is late by way of an electronic message within the PAYE online system. You need to go to the PAYE online section of the HMRC website to read those electronic messages, or view them using the PAYE desktop viewer (PDV) software.
The full payment submission (FPS) is late if it is filed after the date on which the employees are contractually due to be paid. This contractual date should be recorded in your payroll software as the “payment date” – the actual date on which the funds are transferred to the employee is somewhat irrelevant. However, employees will get disgruntled if they don’t receive their pay at the time they expect it.
Until 6 April 2016 micro employers (with no more than 9 employees), who were registered for RTI at 6 April 2014, can submit just one FPS by the last payment date in the tax month, irrespective of the actual number of occasions on which they pay employees in the month.
HMRC have defined eight reasons it will accept for submitting an FPS later than the payment date, coded “A” to “H”. If you know your FPS is late, insert the relevant code letter in the “late reporting reason” field on the FPS. This should avoid a penalty notice being issued. Reason “G” is for a “reasonable excuse” which tends to be strictly interpreted by HMRC.
If you receive an RTI penalty notice please tell us immediately.