HM Revenue and Customs (HMRC) is introducing penalties for employers who report their payroll information late from:
6 October 2014 for employers with 50 or more employees
6 March 2015 for employers with fewer than 50 employees
When penalties are charged
You can get a penalty if:
your Full Payment Submission (FPS) was late
you didn’t send the expected number of FPSs
you didn’t send an Employer Payment Summary (EPS) when you didn’t pay any employees in a tax month
HMRC won’t charge a penalty if:
you’re a new employer and you sent your first FPS within 30 days of paying an employee
it’s your first failure in the tax year to send a report on time (this doesn’t apply to employers with fewer than 50 employees for the tax year 2014 to 2015)
Existing employers with fewer than 10 employees, who take advantage of the temporary reporting relaxation, must remember to use late reporting code ‘E’.
How much you pay
How much you’re charged depends on how many employees you have.
1 to 9 £100
10 to 49 £200
50 to 249 £300
250 or more £400
If you’re over 3 months late you can be charged an additional penalty of 5% of the tax and National Insurance that you should have reported.
If you run more than 1 PAYE scheme, you can be charged penalties for each.
Estimating what you owe
If you don’t either submit your FPS on time or tell HMRC by sending an EPS that you haven’t paid any employees, they may raise a specified charge i.e. an estimate of how much HMRC thinks you should pay. This is based on your previous PAYE payment and filing history. You will be able to see any specified charge by viewing your PAYE account online.
A specified charge doesn’t replace the need for you to send your FPS or EPS. Only the submission of the missing FPS or EPS for each month will replace the specified charge(s) with the amount that is due for each month.
If you send in updated year to date figures in your next FPS instead, the specified charges will remain in place, but your accounting record will be adjusted to reflect the year to date figures supplied in the later month.
If you get a penalty
HMRC sends penalty notices in July, October, January and April. A notice will include what you owe, how to pay and what to do if you don’t agree with HMRC’s decision to charge you.
Pay the penalty within 30 days of getting the notice or you’ll be charged interest if you don’t.
The first penalty notices for tax year 2014 to 2015 will be issued in January 2015. You will be able to appeal online against a filing penalty, using HMRC’s Online Service. In some cases, HMRC will accept and settle the appeal automatically.
You can appeal if you think:
the penalty is not due
the amount of the penalty is wrong
you had a reasonable excuse for sending your reports late
These are some of the reasons you can give as grounds for appeal:
data on the returns was incorrect
death/bereavement
filing expectation incorrect
filed on time
fire/flood/natural disaster
ill health
IT difficulty
missed correction/easement
no longer have any employees
no payments to employees
theft/crime
other