HMRC confirms late RTI penalties

3rd December 2012

Details on the penalties for late and inaccurate returns submitted via the new Real Time Information (RTI) system have been published by HMRC.

HMRC's programme director for RTI, Suzanne Newton, confirmed it will give most employers a year to get used to reporting in real time before implementing the new penalties.

RTI will require almost all businesses and pension providers to report their employee's PAYE payments such as tax and NICs on or before each pay day, as opposed to the end of each tax year.

Designed to simplify and modernise the way PAYE payments are recorded, the majority of employers will join RTI from April 2013, with all required to use the new system by October 2013.

According to the guidance:

  • Penalties for late in-year Full Payment Submissions (FPS) will not begin until April 2014. The current penalty process will continue to apply at the year end, with a penalty issued if the relevant information is not up to date by 19 May. Letters will be issued to employers from October 2013 to ensure they understand they would have been liable to a penalty.
  • Automated late payment penalties will not begin until April 2014.
  • No penalties for inaccurate in-year FPS will be charged for the 2012-13 tax year.
  • Penalties may be charged after the end of the tax year based on final FPS for the year.
  • Inaccurate FPSs for the 2012-13 tax year may incur in-year penalties.

The pilot programme of RTI has seen over 2.1 million individual records submitted from more than 15,000 PAYE schemes to date.

"Feedback from pilot employers is that reporting in real time is straightforward for the vast majority of them," said Suzanne Newton.

Further guidance on the penalties for RTI can be found on HMRC's website.

We can help with RTI and your PAYE needs. Please contact us to find out more.