Experts welcome more relaxed PAYE penalty regime

Tax experts have welcomed an HM Revenue & Customs’ (HMRC) announcement that it will take a less rigid approach to penalties for employers who provide PAYE information late.

HMRC announced on 17 June that rather than issuing late filing penalties automatically to employers whenever they missed a deadline for sending PAYE information, it would take “a more proportionate approach and concentrate on the more serious defaults on a risk-assessed basis.”

It said: “This ‘risk-based’ approach will apply to submissions that were late from:

  • 6 March 2015 for employers with fewer than 50 employees, and
  • 6 January 2015 for employers with 50 or more employees.

“HMRC will continue to issue risk-based penalties for the 2015 to 2016 tax year. 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.”

Colin Ben-Nathan, who chairs the Chartered Institute of Taxation’s employment taxes sub-committee, said: “We welcome the fact that HMRC are revisiting their approach to penalties and looking to focus much more on serious cases of abuse and persistent non-compliance.

“The requirement on employers to send PAYE information in ‘real time’ has proved difficult for some employers to comply with, especially the smallest and those whose employees have unpredictable working hours. It has imposed new and sometimes onerous obligations on employers.

“HMRC are right to have taken a pragmatic approach so far to the levying of penalties, initially not imposing them at all for smaller firms and now promising to concentrate on the most serious defaults.”

Link: PAYE late filing penalties