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HMRC are seeking views on how to support employers to understand and comply with the requirement to send PAYE information in real time, and on the appropriate design of penalties for late-filing and late payment.
Under the proposed real time information (RTI) system, employers and pension providers will send the Revenue information about employees’ pay, tax and National Insurance deductions throughout the year, rather than just at the end of the tax year.
Subject to the current pilot being successful, around 1,300 volunteer employers will be reporting PAYE in real time by September, with another 250,000 or so joining the scheme by next March.
Most remaining employers will join from April 2013, with all reporting in this way by October of the same year.
In the new consultation document Securing Compliance with Real Time Information – Late Filing and Late Payment Penalties, HMRC invite views on maximising compliance and creating a fair and effective penalty regime that will encourage employers to make timely RTI returns and payments, while deterring those who would deliberately avoid complying.
A range of support and advice will be available to help employers meet their obligations, under the new reporting requirements.
There are various options for calculating RTI penalties for different sizes of employer and for various degrees of default, as well as how often penalties should be charged. The fines would be issued automatically and, as with other financial sanctions, would be subject to appeal.
Decisions on exact timings for the introduction of the penalties will be made in light of responses to the condoc, which should be emailed no later than 6 September.
‘As we move into yet another penalty regime, it is very important it is applied with a light touch, in a human way, with a lot of understanding for human frailty and allowing people to get used to the system,’ said Grant Thornton’s Francesca Lagerberg.
‘It should not be viewed as a revenue generating project, particularly as it is the smaller employers who are most at risk since they do not have the resources of large employers.’
