HMRC has provided an update in regards to the Real Time Information (RTI) penalty regime which was to be made effective from 06/04/2016, by confirming the concessions previously available have been extended again by a year.
Under the RTI ruling, employers are required to submit a full payment submission to HMRC. The submission must confirm details and amounts of payments to employees, the submission should be made on or before the pay date. RTI was launched for most employers back in April 2013, HMRC have always stated they intend to penalise companies for late filing, if they did not report payroll on time and did not file their FPS’s. The penalties would be incurred by larger employers as well as smaller employers including companies where the director is the only employee.
After launching RTI, HMRC did relax the penalty regime to allow their own systems to learn to cope with the data being received, as well as allow employers to update their systems and familiarise themselves with their requirements. The penalty regime originally came into force in October 2014 for larger employers, and from March 2015 for all other employers. Since these dates HMRC has offered a concessionary grace period re the filing deadline by not issuing a penalty to any employer filing within 3 days of the due date, this concession was due to end on the 05/04/2016.
In their latest announcement HMRC have confirmed they will extend the concession for a further year and will continue to review late filing penalties on a risk-assessed basis rather than issue these automatically. As a result any late submission of FPS’s will not incur a penalty providing it is submitted within 3 days of the pay date. Employers who regularly file within the 3 day grace period are likely to be contacted by HMRC and warned with the threat of a penalty. The grace period is a concession and not law so employers will have no protection if they are late and HMRC does issue a penalty.
Furthermore, the risk based approach will mean only employers persistently filing late FPS’s will be issued with a penalty by HMRC. With this approach HMRC is trying to curb repeat offending rather than punish those employers who are late occasionally as a one off due to any genuine circumstances.