Since the Real Time Information (RTI) submission process was introduced back in April 2013, a process in which PAYE data is collected and submitted to the HMRC via the Government Gateway, in real time, there have been a number of updates in respect to submission deadlines and associated penalties.
The HMRC ruling states that RTI submissions must be on or before the payment date declared on the FPS (Full payment submission). Originally the automatic late filing penalty was due to come into force on 6 October 2014 for business with 50 or more staff and 6 March 2015 for all other businesses.
As a temporary measure, the HMRC introduced a three-day easement for tax year 2015-16 and adopted a risk-assessed approach to late filing penalties. This allowed employers to submit their FPS within three days of the payment date without incurring an automatic late filing penalty.
Later that tax year the HMRC decided to continue with this easement rule into the 2016-17 tax year saying that it had seen a significant reduction in FPS late filings. But, they did ask employers to pay heed to their 'sending FPS after payday guidance' stating that the filing deadline - on or before the payment date - remained unchanged.
However the 'What happens if you don’t report payroll information on time' page on the HMRC website has been updated on the 7 September 2017, and now states:
'HM Revenue and Customs (HMRC) won’t charge a penalty if:
- your FPS is late but all reported payments on the FPS are within 3 days of your employees’ payday (this applies from 6 March 2015 to 5 April 2018) however employers who persistently file after the payment date but within 3 days may be contacted or considered for a penalty'.
This means this 'temporary' easement policy will continue until April 2018. However, they are still asking employers to be mindful about consistently filing late, also outlining situations as to when a late FPS is deemed appropriate.
Getting your payroll function right is a critical business task, whatever your size, sector or output. RSM continue to remain abreast of all legislative changes and in turn compliant in managing a highly efficient payroll service.
Is your payroll operation compliant and secure? Do you want to avoid the risk of penalties? Please contact Mark Holland or your usual RSM contact to see how we can help you.