late filing penalties Archives - London Chartered Accountants Blog

From 6 March 2015, HMRC’s late filing penalty regime extends to employers with fewer than 50 employees. The penalty regime for large employers- those with more than 50 employees, was introduced back in October 2014.

Under Real Time Information (RTI) a Full Payment Submission (FPS) must be submitted to HMRC on or before an employee is paid. An Employer Payment Summary) (EPS) is made each month to disclose any adjustments to amounts being paid to HMRC including statutory sick pay and statutory maternity pay.

Under the penalty regime, any second late filing of the FPS or EPS (one default is permitted in any tax year) will result in an automatic late filing penalty dependant on the number of employees as illustrated in the table below;

Number of Employees	Amount of monthly filing penalty
1 to 9	£100
10 to 49	£200
50 to 249	£300
250 to more	£400

If a filing is more than three months late HMRC may charge an additional penalty of 5% of the tax and national insurance that should have been reported.

Confusingly, HMRC have announced that all returns may be late by up to three days without incurring a penalty. This consideration is not expected to be withdrawn any time soon.

HMRC have recognised that micro-employers – those with up to nine employees, require more assistance in dealing with the adaption to RTI and hence, they can continue to file their FPS on or before the last payday in the month until April 2016. After this date, they expected to comply fully with the RTI legislation.

Employers can appeal against RTI penalties subject to a 30 day time limit. HMRC have issued guidelines as to what constitutes a “reasonable excuse” and these include death/bereavement, ill health, IT difficulty and theft/crime.

If you need any assistance with RTI or are interested in Goodman Jones becoming your payroll provider, please contact our payroll team at paye@goodmanjones.com

A press release issued by HM Revenue & Customs (HMRC) has confirmed that over half a million taxpayers submitted their 2011/12 tax returns online on the 31 January 2013, making the 31 January filing deadline the busiest day for the submission of returns.

As the 2012/13 tax year ends, HMRC will shortly start issuing tax returns to those within Self-Assessment. HMRC’s statistics indicate that for many the completion of their return will be a low priority at this time, but there are genuine advantages to completing your tax return early.

1. Receive your repayment as early as possible

Where a tax return shows a repayment is due, the repayment will only be issued once the return has been processed. Therefore, any delay in the submission of the return will result in a delay in receiving the repayment.

2. Make a reduced payment on account in July

In some cases a repayment is due where too much tax has been paid on account in the year. One option is to complete your tax return before the second payment on account falls due on 31 July 2013. This may enable you to make a reduced payment at that time.

3. Spread collection of your tax liability over the next tax year, avoiding a lump sum payment in January

Where a return shows a tax liability of £3,000 or less, it may be possible for payment to be collected via your PAYE code. Collection is spread over the course of a tax year, and no payment is required by 31 January. However, the return must be filed online by Christmas for the liability to be ‘coded out’.

4. Budget for any tax liabilities

The main danger in delaying the submission of your return is that you may face an unexpected tax liability. If this happens, it is possible to agree a payment plan with HMRC, but the plan needs to be agreed before the 31 January payment deadline. Leaving the completion of your return until the last minute gives you little scope to put an agreement in place.

5. Avoid penalties and interest

With increased penalties for late returns, and surcharges and interest charged where tax is paid late, any delay in the submission of your tax return can also prove expensive.

All in all, there are real benefits to submitting your tax return early – not least the sense of satisfaction in knowing it’s done for another year!