Changes to late-filing penalties

HMRC has published feedback on its proposals to change how penalties are applied – and looks set to uphold an approach already being used for overdue PAYE information.

The penalty system was reviewed earlier this year to better differentiate between deliberate and persistent non-compliers and those who might make occasional errors for which alternative interventions were more appropriate.

HMRC now says respondents to the consultation exercise are broadly in agreement with the philosophy, saying the approach is designed to keep actions proportionate to the offence. It will now enter into further consultation and, subject to ministers’ approval, a new penalty scheme for late filing and late payment could be rolled out, transforming services in an increasingly digital world.

Those missing deadlines for sending PAYE information, however, are already benefiting.

Rather than issue late-filing penalties automatically, HMRC is concentrating on the more serious defaults on a risk-assessed basis. From 6 March 2015, the approach has applied to late submissions for employers with fewer than 50 employees. It has applied from 6 January 2015 for those with 50 or more members of staff.

A statement on HMRC’s website reads: “HMRC does not want to charge penalties, but wants employers to report on time. It wants to help employers who are trying to do the right thing, rather than penalise them.

“This move to issuing risk-based, late-filing penalties also continues HMRC’s strategy of adapting its approach, where necessary, before moving to the next phase of implementation.

“This approach will enable HMRC to concentrate more resources on the more serious failures to comply and to focus on educating employers about their filing obligations.”

The deadlines for sending PAYE information stay the same, including the requirement to send PAYE information on or before the time that employees are actually paid or due to be paid.

At Moore Thompson, we provide a cost-effective payroll service that ensures employers stay fully compliant with HMRC requirements. For more information, please contact us.