Employers and PAYE: HMRC delays penalty regime

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Relief for employers as penalties on use of Real time Information system are delayed in response to teething difficulties

HMRC has announced that it will stagger the start of a new penalty system for late payment and filing penalties in relation to PAYE real time information (RTI), to give HMRC and employers more time to adapt to reporting in real time.

Tina Riches, national tax partner at Smith & Williamson, the accountancy and investment management group says:

“Employers and their agents will welcome the real time relief brought by HMRC’s pragmatic decision to delay the introduction of new penalties around reporting PAYE in real time.

“Thousands of employers, including a number of our firm’s clients, have been affected by problems in the processing of online returns sent to HMRC, which had resulted in real time problems. Some had HMRC debt collectors arriving on their doorsteps, even when all their PAYE had been paid. To load penalties onto a system which has not yet bedded down would have increased their misery and distress.

“Staggering the introduction of the penalties is a sensible way forward and I would urge the Government to keep this under review in the lead up to both October 2014 and April 2015, the new planned dates to introduce the different penalties.

Employers should bear in mind that they are able to check the status of their PAYE payments and the amounts HMRC considers are due, by checking HMRC’s dashboard.

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