Following a review, HMRC has decided to continue the risk-based approach to PAYE late filing and late payment penalties for employers throughout the 2019/20 tax year with penalties due to go out from September
This means that late filing and late payment penalties will be considered on a risk-assessed basis rather than being issued automatically. HMRC has confirmed that penalties for 2019/20 will be issued from September 2019.
HMRC will not charge penalties automatically for 2019/20 provided a Full Payment Submission (FPS) is filed within three days of the payment date. This is not an extension to the current statutory position on reporting PAYE payments which remains unchanged.
All submissions must be filed on or before each payment date unless any of the circumstances set out in the ‘Sending an FPS after payday’ guidance arise.
Where there is a pattern of persistent late-filing within three days of the statutory filing date, employers will be reviewed and may be charged a filing penalty as part of HMRC’s risk-based approach.
Late payment penalties
HMRC will continue to issue late payment penalties using a risk-based approach for 2019/20. The approach is based on areas of greatest risk and non-compliant behaviour.
The date for making PAYE payments to HMRC electronically is the 22nd of the month (or quarter for those eligible to pay quarterly) following the tax month or period to which they relate. For cheque payments or other non-electronic methods payment is due by 19th of the following month or quarter to which the payment relates.
HMRC may charge interest on the amount outstanding for late payment, which will accrue until the total amount is paid.
Reporting payroll information
‘Accurate and timely reporting of payroll is really important. The payment date reported on employers’ Full Payment Submission must be on or before the date employees are paid, not the payroll run date, or another date from the payroll system. Incorrect recording of this date is one of the most common reasons for the issue of a late filing penalty,’ HMRC said in its latest Employer Bulletin.
‘If you are unable to report payments on time, and you have a reasonable excuse, you should use a late reporting reason code. You must include the code for every payment on the FPS where the circumstances apply.’
HMRC sends an electronic receipt to confirm a submission has been received ‘although this doesn’t mean that it’s correct or on time’, HMRC added.