RTI: Moving Away from Implementation and Towards Penalties

As we move ever closer to the end of the first year of reporting PAYE in real time, HMRC are steadily moving towards a culture of compliance rather than implementation. A new penalty regime for RTI comes in from 6 April 2014, specifically to encourage compliance with the information and payment obligations.

This will involve late filing penalties applying to each PAYE scheme, with the size of the penalty based on the number of employees in the scheme. Monthly penalties of between £100 and £400 will apply to micro, small, medium and large employers. Each scheme will be subject to only one late filing penalty each month regardless of the number of returns due in the month.

Each year companies will be allowed one unpenalised default, but all subsequent defaults will attract a penalty. Any penalties will be charged quarterly and are subject to the usual reasonable excuse and appeal provisions.

In preparation for these changes, it is important that your PAYE schemes are up-to-date and well-organised by the April tax year-end.

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