How to avoid RTI penalties

Knowledge base from Boox

By Lynne Gowers on 12th February 2015

How to avoid RTI penalties

Small companies with fewer than 50 employees must report their payroll information on time otherwise they will face automatic penalties from HM Revenue & Customs (HMRC) from March 6th.

The penalties run on a monthly basis with those employing up to nine people being charged £100 and companies with ten to 50 employees facing a £200 a month charge. Should you be over three months late with your PAYE filing then you may also be charged an additional five per cent plus any National Insurance that should have been reported.

How to avoid RTI penalties

While this was announced in August 2014, the Employer Bulletin 51 highlighted that those who had incurred such penalties would begin receiving quarterly penalty notices from the beginning of February 2015.

HMRC has stated that it wants employers to understand and comply with their reporting responsibilities rather than incur penalties….

With this in mind there are a few things that you can do to protect yourself from the automatic penalties, with the first being rather obvious: report your PAYE on time, sending a Full Payment Submission (FPS) either on or before the earliest payment date you have reported on it.

If you are receiving pay advice via our online system and are correctly triggering RTI submissions via the Mark As Paid function, Boox will submit the required RTI information to HMRC on your company’s behalf. As long as your company is paying you the amounts that match the RTI submissions and these are submitted before the company pays you, you should prove to be compliant with HMRC’s RTI regulations. However, deviating from the amounts submitted via RTI, or not submitting RTI at all, could likely lead you to fall foul of the legislation and lead to your company incurring penalties.

If you would like further information on how Boox can help you comply and remain compliant with RTI, please don’t hesitate to get in touch.

Further advice from HMRC

If you, for whatever reason, need to report any payments late on a FPS submission, that you inform it using the late reporting reason.

It is also important that you plan ahead should you have any holidays booked when your payroll information is due by sending an FPS or Employer Payment Summary (EPS) in advance.

An EPS can also be sent if you don’t actually pay any employees during the tax month or if there is going to be a break in activity where there will be no need to report for a few months.

You should also inform HMRC if you change the way in which you pay employees, or when anyone leaves or joins and the number of payrolls also change.

However, should you have already received notice of a penalty and have a fine to pay and wish to appeal, you can do so through HMRC’s Online Services through its Penalties and Appeals Service (PAS).

Obviously, it is more than ideal that all small businesses ensure that their PAYE information is sent in on time and it is very beneficial to actually sign up for email notifications through PAYE Online.

HMRC also send out electronic messages to warn employers when they may be close to receiving a penalty, so if you receive one make sure to act on it as soon as possible.

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