As part of HMRC’s transition to in-year PAYE Real Time Information penalties for late and non-filing, they are changing their approach to issuing updated penalty notices for the same PAYE non filing default. These changes impact both the 2012 to 2013 and 2013 to 2014 tax years.
PAYE for Employers: reduction in penalty notices for outstanding returns
Up to and including 2013 to 2014, employers who do not meet their filing obligations may be liable to an escalating penalty, based upon the size of the employer and the number of months for which the filing default persists. The penalty will be £100 per 50 employees for each month or part month the returning is outstanding from 20 May 2014 to 19 September 2014. So an employer with 50 or less employees where the return is still outstanding by 20 September 2014 will receive a penalty of £400.
When a late return is actually received, in every case HMRC will issue a revised updated penalty notice showing the correct amount of penalty due.
2012 to 2013 Tax Year
HMRC will not now issue a third penalty notice (originally scheduled for issue at the end of May this year) to those employers who have not yet submitted their 2012 to 2013 return which was due on 19 May 2013. HMRC will continue to pursue any missing returns by virtue of the penalty notices already sent to those employers in September 2013 and January 2014.
HMRC would encourage any employer who has yet to file to do so as soon as possible or contact HMRC if they have no return to make.
2013 to 2014 Tax Year
The filing deadline for 2013 to 2014 returns of 19 May 2014 has recently passed.
HMRC will (as in earlier years) be shortly writing to those employers who they believe have yet to submit their outstanding 2013 to 2014 return to alert them to take immediate action in order to avoid any penalty that is due from building up any further. Employers who had no return to make for the 2013 to 2014 tax year should contact HMRC as soon as possible so that their records can be updated accordingly.
Employers who have yet to file their 2013 to 2014 return in real time, should do as soon as possible. For more information on filing the 2013 to 2014 PAYE final submission for the year please see PAYE final submission for the year and end-of-year tasks.
For those employers who HMRC have agreed can send their PAYE information on paper and have yet to file their P35 Employer Annual Return should do so as soon as possible. For more information on filing the 2013 to 2014 P35 Employer Annual Return please see Filing your Employer Annual Return (P35 and P14s) for 2013 to 2014.
HMRC will also be sending in September 2014 (as in previous tax years) a penalty notice to any employers who by that time has not filed their outstanding 2013 to 2014 return, which will be by then four months late.
HMRC will not now be issuing further ‘interim’ penalty notices for outstanding 2013 to 2014 returns which would have been issued in January 2015 and May 2015. HMRC will continue to pursue those returns that remain outstanding for the 2013 to 2014 tax year by virtue of the penalty notice issued in September and will finalise any penalty due upon receipt on the late filed return.
These actions are part of a series of measures which are intended to help in smoothing the transition to in-year penalties. This approach should help avoid any confusion between the end of year penalties currently in operation and the new in-year penalties which are due to commence in October 2014 with the first quarterly penalty notices scheduled for issue in January 2015.