HMRC extends soft approach to late payment RTI fine

It’s an organisation not often known for its lenient or softly approach but HMRC has offered some welcome relief for finance teams.

Tax officials are easing off on the planned introduction of automatic penalty fines for late payroll submissions via their Real Time Information (RTI) system.

It was originally planned that automatic fines would go live on April 5, 2016 for late filing of Full Payment Submissions (FPS). But inquiries by accountingWEB revealed they are holding off on the move.

They will not yet be turning on their automatic fines system and will instead continue to treat late payments on a case-by-case basis. This policy will remain until April 2017, at the least.

Also being extended is a grace period for late FPS submissions with HMRC ignoring anything within three days of the payment date. But they warn that persistent offenders will still be targeted.

Fairer RTI fines

The move is designed to avoid unduly punishing genuine errors and occasional lapses. Instead they want to focus on those they believe to be deliberately missing deadlines.

In a statement released last year, they said:

“HMRC does not want to charge penalties, but wants employers to report on time. It wants to help employers who are trying to do the right thing, rather than penalise them.

“This move to issuing risk-based late filing penalties also continues HMRC’s strategy of adapting its approach, where necessary, before moving to the next phase of implementation.”

The switch to RTI has been described as the most radical change to the PAYE system since it was first launched 70 years ago.

The system was designed to lessen the annual burden on companies to supply details of employees’ wages, benefits and expenses by keeping these details constantly updated.

The less rigid approach towards fines will be welcome news for employers with late filing fines ranging from £100 and £400, based on the size of the business.

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