RTI penalties

Produced by Tolley in association with Vince Ashall

The following Employment Tax guidance note Produced by Tolley in association with Vince Ashall provides comprehensive and up to date tax information covering:

  • RTI penalties
  • Late filing
  • Late filing of FPS
  • Expected number of FPSs not received
  • No EPS filed when no payments in tax month
  • Late filing penalties
  • Late payment
  • Inaccurate returns
  • Appeals against penalties

RTI penalties

HMRC had the power to impose penalties under the old reporting regime (P14, P35, etc) and this has continued under Real Time Information (RTI). Possibly owing to a recognition that RTI took a while to get up to speed in all areas (see Employer Bulletin June 2015, item 2), HMRC, at least at first, relaxed its stance somewhat, certainly with regards to the automatic imposition of RTI-related penalties.

Nevertheless, despite HMRC stating that it does not want to charge penalties and that it will issue electronic alerts to help employers meet their filing and payment obligations, penalties will be issued on a risk-assessed basis.

Penalties may be issued for late filing, late payment and / or filing incorrect returns.

Late filing

The guiding principle for employers under RTI is that the Full Payment Submission (FPS) has to be filed on or before the employee is paid (see the Real time information guidance note). The payment date is included in each employee’s record on the FPS and HMRC compares this date to the date the FPS was received to determine whether an FPS has been filed late.

Late filing of FPS

It only takes one employee’s payment date to be before the date the FPS is received for an employer to fall foul of the late filing rules. Under normal circumstances, there should not be a problem for employers in ensuring that the FPS is filed on or before the payment date. However, HMRC guidance states that no penalty will be charged if all reported payments on the FPS are within three days of the employees’ pay day. This three-day easement is kept under annual review and HMRC has so far extended it to 5 April 2020 (see Employer Bulletin August 2019, item 2).

However, where non-financial information, such as an amended leaving date or late notification of a leaving date for an earlier period, is being provided and the employee is not being paid in that period, a return may

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