Copyright © 2024 Thesaurus Software Ltd T/A Bright Software Group.
3 Shortlands, Hammersmith, London, W6 8DA
[email protected] 0345 9390019Jul 2014
10
Penalties will apply:
Where a Full Payment Submission (FPS) has not been filed on or before the date you paid your employees, or where you have not revealed why submission is legitimately late by using the late reporting reason field.
Where the expected numbers of submissions have not been received.
These rules apply to each PAYE scheme, rather than each employer.
How do I avoid incurring a late filing penalty?
Using HMRC's Online Service - PAYE for employers
You must submit an FPS each time you make a payment to an employee, on or before the date that you pay them.
If you don’t need to send an FPS because you did not pay any employees in a tax month, it is important that you inform HMRC by sending a nil Employer Payment Summary (EPS) by the 19th of the following tax month. Otherwise, it is likely that it will be assumed that you have missed a submission and will therefore issue a late filing penalty, which you will have to appeal.
To help get your PAYE up-to-date and avoid future penalties, you should take note of any late and non-filing electronic Generic Notification Service (GNS) warning messages which we send to help you get your PAYE affairs up to date – see the Using HMRC's Online Service - PAYE for employers for more information.
Jun 2014
17
Employers who no longer need their PAYE scheme can avoid non-filing Generic Notification Service (GNS) messages and penalties by ensuring that they make their final submission correctly.
The actions for employers to take will depend on what type of final submission they are sending, and for what tax year:
2014 to 2015
• Full Payment Submission (FPS) - when making their final FPS for 2014 to 2015 employers should:
• Employer Payment Summary (EPS) - if they have already sent all their payroll information, employers should just complete the 'Final submission because scheme ceased' and 'date scheme ceased' boxes on the EPS.
This will ensure that HMRC's systems are updated to record the PAYE scheme as ceased.
There's more information, and details of the other actions that employers should take when their business ceases, in the PAYE if your business closes or changes guidance.
2013 to 2014 (PAYE reported in real time)
Employers who have already received an interim penalty warning letter, but who:
should follow the EPS actions in 1b above to stop a penalty.
However, if there is PAYE information still outstanding they should also send an Earlier Year Update (EYU) to make a final submission for the year.
Employers should send their final 2013 to 2014 submission as soon as possible to limit any penalty that is due. For full guidance read:
PAYE final submission for the year and end-of-year tasks
Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.
Jun 2014
9
More than 22,000 workers denied the National Minimum Wage (NMW) have received £4.6m in unpaid wages following an HMRC crackdown.
HMRC conducted 1,455 NMW investigations in 2013/14 and found arrears in 47% of cases – the highest strike rate since NMW was introduced.
During the period, HMRC issued 652 financial penalties worth £815,269 and recovered average arrears of around £205 per worker.
Jennie Granger, director of enforcement and compliance at HMRC, said: “Paying the National Minimum Wage is not a choice – it’s the law. HMRC will continue to ensure that workers get at least the wage to which they are legally entitled.
“Where an employer ignores these rules, we will ensure that any arrears are paid out in full and the employer is fined. Rogue employers be warned – we will find you and you will pay.”
In one case a social care provider had not paid its staff for travelling time and other hours worked and was told to repay over £600,000 to almost 3,000 workers.
And a recruitment agency was ordered to pay £167,000 to workers, including some it had classified as unpaid interns.
As a result of the investigations, TUC general secretary Frances O’Grady is calling for further action to be taken by the government and for employers that knowingly underpay their staff to be named and shamed.
“Nearly a million UK workers rely on the national minimum wage, which has become a vital lifeline. There must be no hiding places for companies who flout it.
“The action taken by HMRC is a welcome step but must be the beginning of a concerted campaign that also raises awareness about the right to a legal wage among those being exploited.”
Bright Contracts – Employment contracts and handbooks.
BrightPay – Payroll & Auto Enrolment Software.
Apr 2014
23
They will now start from 6 October 2014. To avoid late filing penalties, you must make sure all submissions due are fully up to date by 5 October 2014.
In addition to where submissions do not appear to have been filed by the due date, a late filing penalty for a month may be issued where one of the following applies:
• payment information is not received as expected on an FPS
• you haven't told HMRC that no employees have been paid by sending an EPS
However, no penalty will arise for the first month in each tax year where there is a filing default. This means there are a maximum number of 11 fixed penalties per tax year that can be charged for filing failures.
New employers will not be issued with a penalty if their first FPS is received within 30 days of making their first payment to an employee. But after that, normal penalties rules will apply if an FPS is filed late.
The size of the late filing penalties depends on the number of employees within the PAYE scheme.
| Number of employees | Amount of the monthly filing penalty per PAYE scheme |
| 1 to 9 | £100 |
| 10 to 49 | £200 |
| 50 to 249 | £300 |
| 250 or more | £400 |
HMRC will use the latest information available to determine the number of employees, and the size of the filing penalty for each period where a return is late. <
When the penalty notice will be issued
Ordinarily, HMRC will send employers a filing penalty notice quarterly in July, October, January and April, where appropriate. These penalty notices show the amount of the filing penalty for each tax month identified in that quarter. For example, a penalty notice in July will show any filing penalties arising in the first quarter of the tax year - that is, month 1 (6 Apr to 5 May), month 2 (6 May to 5 June) and month 3 (6 June to 5 July).
The penalty notice will advise you of the amount you're being penalised, tell you how you can pay it and what to do if you don't agree a penalty is due.
Additional penalties for returns over three months late
Where a return is late for three months or more and the information that it would have contained has not been provided on a later return, a further penalty may be charged. This additional penalty is set at 5% of the tax/NICs that should have been shown on the late return. This will be used for the most serious and persistent failures.
Apr 2014
8
Who can claim
The Employment Allowance is available from 6 April 2014. If you are eligible you can reduce your employer Class 1 NICs by up to £2,000 each tax year.
You can claim the Employment Allowance if you are a business or charity (including Community Amateur Sports Clubs) that pays employer Class 1 NICs on your employees' or directors' earnings.
If your company belongs to a group of companies or your charity is part of a charities structure, only one company or charity can claim the allowance. It is up to you to decide which company or charity will claim the allowance.
You can only claim the £2,000 Employment Allowance against one PAYE scheme - even if your business runs multiple schemes (also see the further guidance on claiming the Employment Allowance).
Not all businesses can claim the Employment Allowance, see excluded employers for more information.
Excluded employers
You cannot claim the Employment Allowance, for example if you:
- employ someone for personal, household or domestic work, such as a nanny, au pair, chauffeur, gardener, care support worker
- already claim the allowance through a connected company or charity
- are a public authority, this includes; local, district, town and parish councils
- carry out functions either wholly or mainly of a public nature (unless you have charitable status), for example:
You do not carry out a function of a public nature, if you are:
providing security and cleaning services for a public building, such as government or local council offices
supplying IT services for a government department or local council.
Personal and Managed Service Companies who pay contract fees instead of a wage or salary, may not be able to claim the Employment Allowance, as you cannot claim the allowance for any deemed payments of employment income.
Service companies can only claim the allowance, if you pay earnings and have an employer Class 1 NICs liability on these earnings.
Apr 2014
7
HMRC has recently issued letters entitled 'Paying PAYE electronically' to employers who are due to make their one off annual 2013 to 14 PAYE payment for month 12, 6 March to 5 April by 19/22 April 2014.
HMRC has published the following message on their ‘What’s New’ pages:
Employers who pay PAYE only once a year and are due to pay month 12 of 2013 to 14
"Most employers now report their PAYE information in real time, known as Real Time Information (RTI). This means each time you pay an employee you must submit details about employees’ pay and deductions to HMRC using payroll software. As part of this change and our ongoing drive to encourage employers to pay using electronic methods of payment, we have stopped automatically issuing letters with a payslip to all employers who pay their PAYE on an annual basis in one single month of the year.
If you have received one of the ‘Paying PAYE electronically’ letters we will not be sending you a payslip to pay your month 12 payment and we are encouraging you to follow the guidance on the letter and pay us electronically.
As the letter advises, paying electronically is more secure, faster, easier and allows you to pay by the 22 April instead of the 19 April if you paid by cheque in the post.
If, exceptionally, you are unable to pay using an electronic method then you will find a pro-forma payslip and guidance on how to use it elsewhere on this website.
Your payment is due on the 19 April if paying by cheque in the post or 22 April when paying electronically. We may charge interest and late payment penalties if you do not make your payment on time."
Mar 2014
20
1. The scheme will launch in autumn 2015
You’ll be able to open an online account, which you can pay into to cover the cost of childcare with a registered provider. This will be done through the government website, GOV.UK.
2. For every 80p you or someone else pays in, the government will top up an extra 20p
This is equivalent of the tax most people pay - 20% - which gives the scheme its name, ‘tax-free’. The government will top up the account with 20% of childcare costs up to a total of £10,000 - the equivalent of up to £2,000 support per child per year.
3. The scheme will be available for children up to the age of 12
It will also be available for children with disabilities up to the age of 16, as their childcare costs can stay high throughout their teenage years.
4. To qualify, parents will have to be in work, earning just over an average of £50 a week and not more than £150,000 per year
The scheme is designed to be flexible for parents if, for example, they want to get back to work after the birth of a child or work part-time.
5. Any eligible working family can use the Tax-Free Childcare scheme - it doesn’t rely on employers offering it
Tax-Free Childcare doesn’t rely on employers offering the scheme, unlike the current scheme Employer-Supported Childcare. Any working family can use the Tax-Free Childcare scheme, provided they meet the scheme’s eligibility requirements.
6. The scheme will also be available for parents who are self-employed
Self-employed parents will be able to get support with childcare costs in Tax-Free Childcare, unlike the current scheme (Employer-Supported Childcare) which is not available to self-employed parents. To support newly self-employed parents, the government is introducing a ‘start-up’ period. During this, self-employed parents won’t have to earn the minimum income level, £50 a week.
The scheme will also be available to parents on paid sick leave and paid and unpaid statutory maternity, paternity and adoption leave.
7. If you currently receive Employer-Supported Childcare then you can continue to do so
You do not have to switch to Tax-Free Childcare if you do not wish to. Employer-Supported Childcare will continue to run. Parents won’t be able to register for Employer-Supported Childcare after Tax-Free Childcare is introduced in autumn 2015, but those already registered by this date will be able to continue using it for as long as their employer offers it. However, Tax-Free Childcare will be open to more than twice as many parents as Employer-Supported Childcare.
Employers’ workplace nurseries won’t be affected by the introduction of Tax-Free Childcare.
8. Parents and others can pay money into their childcare account as and when they like
This gives you the flexibility to pay in more in some months, and less at other times. This means you can build up a balance in your account to use at times when you need more childcare than usual, for example, over the summer holidays.
It’s also not just the parents who can pay into the account - if grandparents, other family members or employers want to pay in, then they can.
9. The process will be as simple as possible for parents
The process will be light-touch and as easy as possible for you. For example, parents won’t have to report any change of circumstances to HMRC; there will be a single log-in service where parents can view accounts for all of their children at once.
10. You’ll be able to withdraw money from the account if you want to
If your circumstances change or you no longer want to pay into the account, then you’ll be able to withdraw the money you have built up. If you do, the government will withdraw its corresponding contribution.
Mar 2014
6
HM Revenue & Customs (HMRC) will withdraw the CA6855 clerical tracing service on 31 March 2014.
This is following the introduction of reporting PAYE in real time and the National Insurance number verification request service (NVR).
If you are not yet reporting PAYE in real time yet and need to use this service you should do so now.
If you are reporting PAYE in real time but you have not used the NVR service you should read the guidance 'Check an employee's National Insurance number' that can be found in the guide 'Making sure you use the correct National Insurance Number'.
BrightPay includes the NVR request among its list of RTI functions.
Feb 2014
24
When taking on a new employee employers reporting their PAYE in real time are no longer required to submit a completed P46 or P45 Part 3 to HMRC
Instead they will need to gather specific information to enable you to complete and submit a Full Payment Submission (FPS) to HMRC the first time you pay a new employee.
In light of this change of process, HMRC are replacing the P46 starter forms on their internet site with Starter Checklists to help you gather the information needed to submit a FPS. The main checklist can be found at http://search2.hmrc.gov.uk/kb5/hmrc/forms/view.page?record=kPZMkDs75qQ&formId=7377
You do not need to send the checklist to HMRC, and there is no obligation for you to use one, you can, if you prefer, obtain the starter information for the FPS using your own forms and practices.
HMRC also has a separate checklist to help you gather information if you take on a new employee who has been seconded to work in the UK from overseas. The checklist and guidance can be found at http://search2.hmrc.gov.uk/kb5/hmrc/forms/view.page?record=2Abcj2SjIsA&formId=7398
Reminder
The data items; “Living in UK for 183 days or more”, “Living in UK for less than 183 days”, “Employee Working both in and out of the UK but Living Abroad” and “Indicator of European Economic Area citizen” must be left blank unless the employee is seconded to you from an overseas employer.
Feb 2014
21
HMRC director general personal tax, Ruth Owen, who holds responsibility for the RTI project, has announced “Penalties for late filing of RTI submissions were due to come in from April – that will now start from 6th October this year, so that gives employers through to October to bring everything up to date.
“In terms of automated late-payment penalties they were due to start in April of this year and recognising that people are still getting to understand their charges under RTI we’ve decided to start late payment penalties from 6th April 2015 – so a 12 month delay to those penalties.
“Interest will still apply, so anyone paying late payment interest – this will apply from April 2014, as has always been the case, so no change. We are not delaying interest.
“Also there are some businesses that have been using the concession for ‘on or before’ during this year for whom the concession will not apply from April, so if you are a small but not micro business you will now need to start reporting in real time."
Industry response
The Chartered Institute of Payroll Professionals (CIPP) has been lobbying for a delay in the introduction of RTI penalties as reported here.
Its associate director of policy, research, and strategic visibility, Karen Thomson, said: “The CIPP is delighted the minister, David Gauke, and HMRC has listened to the concerns of the profession and welcomes the delays to the RTI penalty regime.
“This additional time will allow both employers and HMRC to iron out all the teething problems being experienced by employers, particularly around the payment reconciliation process without the fear of financial implications.”
And Paul Aplin, chairman of the ICAEW tax faculty technical committee, said: “I think it is absolutely essential that the penalties are delayed as there have been a number of issues including incorrect demands, difficulty in reconciling amounts and also not all employers are even on RTI now so we have not been through one complete cycle and until we have been through a complete cycle for all employers and until those issues with incorrect demands are sorted it is completely inappropriate to charge penalties.”
Copyright © 2024 Thesaurus Software Ltd T/A Bright Software Group.
3 Shortlands, Hammersmith, London, W6 8DA
[email protected] 0345 9390019