NO PENALTIES should be levied on employers submitting inaccurate real-time PAYE returns after the April 2014 introduction date, according to the CIoT.
Due to commence in April, real-time information will see see 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.
Currently, it is proposed to levy penalties for incorrect returns from the point that the Finance Bill 2013 gains Royal Assent – expected to be July. In the interim period between July 2013 and April 2014 late penalties will be charged at the end of the financial year.
Additionally, the institute called for the penalty-free period to be extended for the final tranche of employers joining the scheme – such as care and support employers – which are due to link up with the system in April 2014. The CIoT proposes their penalty-free period should run until April 2015.
Concerns over the system have been raised in the past, with representatives of the ICAEW telling MPs the requirements for small businesses are “at best, unrealistic and at worst, impossible” in November last year.
Chair of the CIoT’s employment taxes committee Colin Ben-Nathan said real-time information represents a “substantial new responsibility and burden being placed on employers”.
He said: “The penalty regime must be proportionate and give time for employers to get used to the new and sometimes onerous obligations RTI imposes on them.
“It is welcome that the new late filing and late payment penalties will not be applied until April 2014. However, given this, it seems odd that the penalty for inaccuracies in RTI returns will be in place from summer 2013. Employers may take the view that it is best to delay filing if there is a risk they could be penalised for an inadvertent mistake.”
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