Delay in Penalties for Late "Real Time" Returns Announced

HMRC have announced that they will delay the introduction of penalties for late "real time" payroll returns from its original implementation date of 6 April 2014 by up to one year.

The move will come as a relief to businesses who have been battling to get to grips with the new reporting scheme, and also to accountants, some of whom have been receiving  incorrect PAYE “no-filing” notices on behalf of their payroll clients as a result of technical glitches within the new reporting system.

In staggering the new automatic in-year Pay As You Earn (PAYE) penalties (for late filing and late payment), and in-year interest (charged on tax and National Insurance Contributions (NICs), HMRC acknowledge that Real Time Information (RTI) is proving to be a big challenge to businesses.

Penalty Tabl

Above: Under the new timetable for penalties, if employers file
RTI late up to October they’ll only be charged interest
with automatic penalties not kicking in until April 2015.

The delay will allow employers more time to adapt to reporting in real time, whilst also giving HMRC the opportunity to continue to improve its own internal systems and guidance.

HMRC’s Director General for Personal Tax, Ruth Owen, said:

 “The introduction of RTI is going extremely well for the majority of employers but there are still some who need a bit of time to adapt fully to the changes. This additional time will give us the opportunity to ensure that improvements to our internal systems are working, to learn from them and to provide better customer support to employers who need more time to adapt.”

HMRC is also working closely with the Department for Work and Pensions (DWP) to ensure that RTI will support the operation of Universal Credit, which brings together means-tested in and out-of-work benefits.

If you are struggling to adapt to the new reporting systems or require payroll advice you can contact our Director of Payroll Services, Ken Davies by email or calling 0151 423 7500 who will be happy to assist.

Mitchell Charlesworth also offer a fully outsourced payroll service. More information can be found here.

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