Risk-based PAYE late filing and payment penalties continue for current tax year
By Justine Riccomini, Head of Taxation (Scottish Taxes, Employment and ICAS Tax Community)
26 June 2018
HMRC has confirmed it will continue to adopt a risk-based approach to PAYE penalties for late filing as well as late payment for the 2018-19 year.
The story so far
The risk-based penalties regime, as opposed to its opposite number, automatic penalties, targets persistent late filers or payers and is thought to save work on both sides. Employers who file or pay within 3 days of the deadline who do not have a pattern of missing the deadlines will not be penalised. HMRC is keen to stress that this does not represent an informal extension to the filing and payment deadlines – it is simply an administrative easement for when isolated incidences occur.
2018/19
The usual requirement to file Full Payment Submissions (FPS’s) “on or before” the deadline under Real Time Information procedures still applies. A helpful link to the guidance on what is a qualifying reason for sending a late submission. Persistent late filers may be contacted, and a penalty imposed. The same approach to late payers will be taken.
The future
A wider review of penalties is underway and a further review of PAYE related penalties will be executed in respect of the 2019-20 tax year and beyond. However, the risk-based approach is likely to continue for the foreseeable future as this is seen to be the most effective method.
Don’t miss the messages
One helpful hint from HMRC is not to ignore Generic Notification Service (GNS) messages, as these serve to remind employers and agents that filing is overdue. Messages will be sent by HMRC where FPS’s and Employer Payment Summaries (EPS’s) are outstanding on to the Real Time Information platform.