RTI penalties to be staggered, HMRC confirms

by Calum Fuller

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12 Feb 2014

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HMRC building

THE IMPOSITION of penalties relating to real-time PAYE submissions is to be staggered, HMRC has confirmed.

Real-time PAYE - also known as RTI - sees PAYE reported on or before the date payment is made, while changes will be reported as and when they occur, rather than at the end of the financial year. Changes in circumstances - such as a pay rise, promotion or departure from job - are reported as they happen.

Several key government policies, including the introduction of Universal Credit and the £2,000 National Insurance allowance are dependent on the ability to calculate PAYE in real-time.

Having listened to stakeholder feedback, HMRC has decided to stagger the start of the new in-year late filing and payment penalties to give employers more time to adapt to reporting in real time. The new timetable will see in-year interest on any in-year payments not made by the due date commence from April 2014, with automatic in-year late filing penalties from October. April 2015 will see automatic in-year late payment penalties introduced.

ICAEW tax faculty chair Paul Aplin said: "HMRC have really been in listening mode on this. Businesses are getting to grips with running RTI and we felt it was important to get a full year of operating it before bringing in penalties."

He added it was important to allow businesses to view the same RTI dashboard as HMRC, with the business dashboard currently updated twice a month.

HMRC director-general for personal tax Ruth Owen said: "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."

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