What penalties are applied by HMRC if RTI returns are not submitted on time?

Hmrc have recently provided employers with information about late/non filing PAYE penalties, inaccurate reports and how to avoid penalties in the future.

Penalties are applied when one or more of the following occur:

- The full payment submission (FPS) was late
- The expected number of FPSs are not sent for any given period
- An EPS (Employer Payment Summary) is not sent when you did not pay any employees in any given pay period

HMRC will not charge a penalty if:

- The FPS is late but all reported payments on the FPS are within 3 days of the employee’s payday
- A new employer sends their first FPS within 30 days of paying an employee
- It is the first failure in the tax year to send a report on time (this does not apply to employers who register with HMRC as an annual scheme or have fewer than 50 employees for the tax year 2014 to 2015)

HOW MUCH WILL BE CHARGED FOR LATE FILING?

Number of employees - Monthly penalty

1 to 9 - £100
10 to 49 - £200
50 to 249 - £300
250 or more - £400

If an employer is over 3 months late they wil charged and additional penalty of 5% of the tax and NI Insurance that they should have reported.

Also be aware that if there is more than one PAYE scheme penalties can be charged on each!

Read HMRC users & Auto Enrolment: Manual vs. Automation

Posted byDenise CowleyinHMRCPayroll SoftwareRTI

The Pensions Regulator publishes recent automatic enrolment research findings

The Pensions Regulator has published new research which tracks awareness of auto enrolment amongst employers and intermediaries and how they are preparing to act.

The Key Findings from the Intermediaries survey were:

- There was almost universal awareness of auto enrolment amongst all types of intermediaries (between 97% & 98%), with bookkeepers similarly high (94%).

- Payroll administrators reported a significant increase in their ability to answer clients questions, with 54% (up from 33%) believing they are fully able to answer all queries.

- There are increasing proportions of intermediaries planning to act on behalf of their clients, as opposed to taking more passive roles of providing information or technical advice (payroll administrators 71%, IFAs 53%, accountants 44% and bookkeepers 42%)

- The vast majority (96% or more) of accountants, bookkeepers and payroll administrators planned to provide a service to micro employers, while most IFAs did (78%).

The Key Findings from the Employer Survey were:

- Nine in 10 employers staging between August and November 2015 had commenced for automatic enrolment.

- 7 – 10 small employers expected to rely on an adviser to provide practical assistance with automatic enrolment.

- Most (79%) employers staging in 2015 knew their staging date. A lower proportion (29%) of employers staging between January – November 2016 knew their staging date, similar to the (30%) of employers staging between January - April 2017 who knew their staging date.

- Awareness of automatic enrolment increased significantly amongst both small and micro employers.

Posted byDenise CowleyinAuto Enrolment

HMRC address change for employers

HMRC have changed their address for PAYE Penalties and Statutory Sick Pay (Form SP32 to manually calculate your employee’s Statutory Sick Payments).

If you are late reporting payroll information to HMRC and receive a penalty from 27th April 2015 all written appeals need to be sent to the address below. Similarly SP32 forms should be sent to the same address.

National Insurance Contributions & Employers Office,
HM Revenue and Customs,
BX9 1BX

Posted byDenise CowleyinHMRCPayroll Software

Do you know your CIS obligations for HMRC ?

HMRC has published webinars, emails and videos on the Construction Industry Scheme which show how the scheme works, taking on and paying subcontractors and how to meet your tax obligations.

You can get business emails from HMRC on the Construction Industry Scheme (CIS).

The next live webinar is on 8th May 2015 from 9am to 10am where you can ask questions during the presentation and get answers from the HMRC host. You will need to register and log in at least 5 minutes before the webinar is due to start.

Posted byDenise CowleyinHMRC

Small Employers Calling for Auto Enrolment Delay

According to research by the ACA (Association of Consulting Actuaries), Nine out of ten employers who have not reached their pension auto-enrolment staging date yet would prefer that the process be delayed until the new raft of new pension reforms are complete.

Thanks to Employee Benefits for their report on the ACA survey:

The ACA 2014 Smaller firms pension survey, which surveyed 414 organisations with 249 or fewer employees, found that six out of ten of respondents are supportive of the new pension’s flexibility, while one in ten are opposed.

The research also found that 56% of respondents support further changes to pensions, whereby current levels of pension tax relief are more targeted to those with lower incomes. More than a third also said that tax relief should be further restricted for those on higher incomes.

Among the 57% of respondents that have yet to auto-enrol, awareness of staging dates and budgeting appears low with only 46% of respondents saying they are aware of these.

The research also found that:

- The Median opt-out of employees from the 43% of respondents that have auto-enrolled employees is between 11% and 15%.

- 57% of respondents with between 10 to 49 employees plan to use the NEST (National Employment Savings Trust) to auto-enrol employees

- 62% of respondents with 10 or more employees are clear about when they must auto-enrol eligible employees.

Posted byDenise CowleyinAuto Enrolment

Are you as an employer rewarding your staff enough?

In a recent survey conducted by Tower Watson Global workforce study it has been revealed that 31% of UK employers give bonuses to employees with the lowest performance rating. The group surveyed over 30,000 employees including 1,863 in the UK and found that employers are spreading the pay pot out more thinly in recent years with the effect that it is widening the gap between pay and performance.

Only 39% of UK workers see a clear link between their pay and performance. The research also found that UK organisations are not differentiating pay sufficiently for top staff.

The top consideration for UK staff when deciding to join or stay in a job remains the salary, the research found the UK bosses are falling short on how they deliver pay programmes including basic salary & bonuses. Nearly half (44%) of employees say their organisation does a good job explaining its Pay/Bonuses Programmes but not surprisingly less than half (43%) of people surveyed believe their employer rewards them adequately for breakthrough and innovative ideas and suggestions.

Posted byDenise CowleyinPayroll

Are you claiming your employment allowance correctly?

In April of 2014 the UK Government introduced the Employment Allowance Scheme. This scheme offers businesses and charities a reduction of up to £2000 (max for tax year 14/15) in the amount of employer Class 1 National Insurance contributions (NICS) they have to pay every year from 6th April 2014.

Once employers process their first month’s payroll in April they are required to send an EPS (employment payment summary) to say that you as an employer are going to claim the employment allowance for 14/15. A lot of companies seem to be allowing for the employment allowance scheme in calculating the NI bill for HMRC but have not sent through their EPS which informs the HMRC that the company is taking advantage of the Employment Allowance scheme.

HMRC have announced that they will now issue generic notifications (otherwise known as GNS messages) to employers who may have failed to claim the Employment Allowance.

The intention behind these notifications is to encourage PAYE schemes to check eligibility and to claim their Employment Allowance. HMRC explain that the new notification may be sent to any PAYE scheme which has not so far submitted an Employment Summary in 14/15. HMRC anticipate that these notifications will not be issued before 25th September.

Posted byDenise CowleyinNICPayroll SoftwareRTI

What will happen if you do not report payroll information on time?

HM Revenue and Customs (HMRC) have issued new guidelines for employers explaining about late/non filing penalties, inaccurate reporting and specific charges and how to avoid penalties.

The new guidance explains to employers that penalties will be introduced from 6th October 2014 for anybody that does not report their payroll information on time (late submissions).

These penalties can arise if a Full Payment Summary (FPS) is sent late, if the employer does not send the expected number of FPSs, or if an Employer Payment Summary (EPS) is not send when the employees are not being paid in any given period.

The guidance will also set out the limited circumstances in which a penalty will not be charged.

Posted byDenise CowleyinHMRCPayroll SoftwareRTI

Call for RTI relaxations for small employers

The Chartered Institute of Taxation (CIOT) has made this submission to review the competitiveness of tax administration in the UK being conducted by the Office of Tax Simplification (OTS).

The CIOT says that their clients find that the reporting of realtime information as being, “too prescriptive, time consuming and even unworkable at times”. They are looking for a permanent concession to allow small employers to report monthly , rather than at the time of each payment of salary or wages.

Posted byDenise CowleyinPayroll SoftwareRTI

Failure to complete end of year declaration 13/14

HMRC have now provided a statement about the small number of employers who did not complete the end of year questions and declaration when submitting their final FPS or EPS for 13/14.

HMRC expects all employers to comply with their legal obligations. Where the final indicator has not been completed but all other obligations are met , HMRC will automatically process the return and calculate the final liability (if any). Employers who fail to complete the end of year questions & declaration will miss an opportunity to demonstrate their low risk status in every respect. This failure will feed into the compliance risk assessment processes.

At the moment HMRC do not have an plans to contact employers who fail to complete the final submission indicator. HMRC are continuing to educate employers to make sure that all of their RTI submissions are full and complete and that they meet their legal obligations. They have said they will monitor the situation and consider whether any further action is required.

Posted byDenise CowleyinHMRCPayroll Software