RTI penalties to be phased in

HM Revenue & Customs (HMRC) has announced there will be a staggered start to the introduction of Real Time Information (RTI) penalties.

Automatic in-year Pay As You Earn (PAYE) penalties for late filing and late payment and in-year interest – charged on tax and national insurance contributions paid late during the year – were due to start from 6 April 2014.

But HMRC said on 12 February that having listened to customer feedback, it had decided to stagger the start of the new in-year late filing and payment penalties to give employers more time to adapt to reporting payroll information in real time. The new timetable for the introduction of penalties will be:

  • April 2014: in-year interest on any in-year payments not made by the due date
  • October 2014: automatic in-year late filing penalties
  • April 2015: automatic in-year late payment penalties.

Ruth Owen, HMRC’s director general for personal tax, said: “The introduction of RTI is going extremely well for the majority of employers but there are still some who need a bit of time to adapt fully to the changes.

“This additional time will give us the opportunity to ensure that improvements to our internal systems are working, to learn from them and to provide better customer support to employers who need more time to adapt.”

Colin Ben-Nathan, chair of the Chartered Institute of Taxation’s employment taxes sub-committee, said:  “We think this is a constructive move on the part of HMRC and will hopefully allow the time that both employers and HMRC need to bed down what is a fundamental change to the PAYE system.”

Link: HMRC RTI information