HMRC takes soft approach to PAYE penalties for short delays

HMRC has announced a change in the rules which mean that from next month employers will not incur penalties for delays of up to three days in filing PAYE information, with late payment penalties reviewed on a risk-assessed basis rather than be issued automatically.

HMRC will not impose PAYE filing penalties for short delays from March 2015, but says there is no change to the filing deadlines. This means filing on or before each payment date unless there are mitigating circumstances as set out in the existing guidance on sending a Full Payment Summary (FPS) after payday.

Any employer that has received an in-year late filing penalty for the period 6 October 2014 to 5 January 2015 and was three days late or less, should appeal online by completing the ‘Other’ box and add ‘Return filed within three days’.

In addition, to prevent the unnecessary penalties being issued, HMRC will be closing around 15,000 PAYE schemes next month that have not made a PAYE report since April 2013 and which appear to have ceased.

HMRC will write to the affected schemes to tell them about the planned closure and what to do if they are, or should be, operating PAYE.

Employers with fewer than 50 employees are reminded that PAYE late filing penalties will apply to them from 6 March.

HMRC is currently consulting about how penalties should be applied for failing to make payments or meet deadlines, with a view to distinguishing between deliberate defaulters and those who make occasional and genuine mistakes.

The consultation closes on 11 May and HMRC says it will review the operation of the changes to the PAYE penalties by 5 April 2016.

Details of the removal of penalties for short details are here: https://www.gov.uk/government/news/hmrc-will-not-impose-paye-filing-penalties-for-short-delays-from-march-2015?

Guidance on sending in the Full Payment Summary (FPS) after payday is here: https://www.gov.uk/running-payroll/fps-after-payday

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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