New automatic penalties in connection with RTI were due to start from 6 April 2014. However having listened to customer feedback, HMRC has decided to phase the start of in-year late filing and payment penalties.
The timetable for the introduction of automatic penalties is now as follows:
- 6 April 2014 – in-year interest on any in-year Pay As You Earn (PAYE) payments not made by the due date.
- 6 October 2014 – automatic in-year late RTI filing penalties for filing a Full Payment Submission (FPS) after the date of payment stated in the report or failure to file an Employer Payment Summary (EPS) reporting a nil payment when required. Employers have up until 5 October to ensure that all RTI filing is up to date for the period from 6 April until 5 October 2014.
- 6 April 2015 – automatic in-year late payment penalties for failure to pay PAYE due in full, and on time for a particular tax month.
Penalties will be subject to a sliding scale, dependent on the number of employees on the payroll. Employers with less than 9 employees will receive a £100 fine, which will increase to £400 for employers with 250 employees or more. The first default in a tax year will not attract a penalty.
Penalties will start being imposed by HMRC at the end of the tax quarter where a penalty is due for a tax month. A tax month runs from the 6th of one month to the 5th of the following.