EMPLOYERS with staff of 50 or fewer failing to pay their PAYE on time will be subject to automated in-year fines from 6 March 2015, HM Revenue & Customs has confirmed.
Real-time information 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.
Those who employ 50 or more people will face penalties from 6 October 2014.
HMRC will send electronic messages to all employers in the near future to let them know when the penalties will apply to them, based on the number of employees shown in the department’s records.
A series of relaxations including the delay of penalties were put in place as RTI was rolled out from October 2013.
HMRC director-general for personal tax Ruth Owen said: “RTI is working well. Our most recent figures show that over 95% of PAYE schemes making payments to individuals are successfully reporting in real time, and 70% say that it is easy to do.
“We know from our experience of rolling out of RTI that to ensure a smooth transition for our customers it’s best to introduce changes in stages. This will allow us to update our systems and enhance our guidance and customer support as needed. We know that those who have had most difficulty adjusting to real-time reporting have been small businesses, so this staged approach means they have a little more time to comply with the new arrangements before facing a penalty.
“We believe this is the best approach for HMRC and our customers, as we all get used to the new in-year penalties.”
Where employers believe they have a reasonable excuse for sending a return late, they will be able to appeal using HMRC’s new online appeals process for automated penalties. This should speed up the appeal process for businesses and HMRC.
In the run up to March 2015, HMRC will examine other ways to encourage employers to comply with the rules, in addition to financial penalties.
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