RTI Late Filing Penalty Update

With effect from 6 March 2015, employers with fewer than 50 employees are required to submit their payroll information to HM Revenue & Customs (HMRC) via the Real Time Information (RTI) system, or face a late filing penalty.

Under the RTI penalty system, businesses that fail to submit their information on time are liable to automatic in-year penalties.

However, HMRC has now confirmed that small businesses that file their PAYE information no more than 3 days after the deadline will not incur penalties.

Small businesses experiencing difficulties in reporting weekly staff payments, or payments occurring more regularly, have previously been allowed to send their information by the end of the tax month.

HMRC has announced that it is currently considering how to differentiate between those taxpayers who deliberately and persistently fail to meet deadlines, and those who make occasional and genuine errors.

A consultation on the penalty system will run until 11 May and HMRC is due to review RTI penalties by 5 April 2016.