By Lyndsey Hall
Filing your company PAYE return late could now incur an escalating penalty based on the size of your business, and increasing monthly until the return is filed and the debt paid. As part of the government’s new penalties system, which will apply to returns from the 2013/14 period onwards, businesses who file late returns will be fined £100 per 50 employees for each month that the return is outstanding.
In addition, due to the implementation of RTI (real-time information) and penalties for late and non-filing, HMRC has changed its approach to penalties. Now, when a late return is received by the Revenue, it will issue a revised penalty notice with the correct amount due.
This new process will also affect tax years 2012/13 and 2013/14: a third penalty notice will not be issued to employers who are yet to submit their 2012/13 return, which was due on 19th May 2013; but HMRC will be writing to employers who they believe have not yet submitted their 2013/14 return, allowing them to file the return before their penalty increases.
In recent years, the Revenue has issued penalty notices early in an attempt to avoid surprising employers with escalated PAYE penalties months after they have missed their end of year deadline. The employer would then receive a notice of the increasing fine every few months until it was paid and the return filed.
New in-year penalty rules come into effect October 2014: employers who incur fees will now receive their first penalty notice in January 2015, when HMRC would normally send out the next round of penalty chasing letters for older outstanding returns.
To find out more about late payment penalties, visit the HMRC website.
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Schedule 56: PAYE Late Payment Penalties
