In the latest Employer Bulletin HMRC are reminding employers that they are about to issue penalty notices to those employers who have failed to meet their RTI filing obligations.
Late filing penalties began on 6 October for employers with schemes of 50 or more employees. Those employers who have incurred these penalties will start to receive the penalty notices, which will be issued on a quarterly basis, from the beginning of February 2015.
The notice will be in the form of a ‘paper letter’, and will set out all filing penalties incurred for the third quarter of 2014/15 ( for tax months 7, 8 and 9 covering the period 6 October to 5 January 2015). The penalty notices may contain more than one penalty.
Agents are not sent a copy of this notice so if you receive one and would like guidance on whether the penalty is due or how to appeal against it please do get in touch as soon as possible. Further guidance on this issue can be found on page four of the latest Employer Bulletin.
Internet link: Employer bulletin
HMRC have announced that, although the vast majority of employers are finding PAYE reporting in real time straightforward, a small proportion of micro employers and their agents still need more time to adapt. They have therefore announced that existing employers with nine or fewer employees who need more time to adapt will be able to report PAYE information on or before the last payday in the tax month until April 2016.
HMRC will be encouraging micro businesses to adapt their processes sooner to ensure that they are ready to report all payments each time they pay their employees by April 2016.
End to the current relaxation
The current relaxation which applies to employers with fewer than 50 employees comes to an end in April 2014. Conditions for the current relaxation can be found by visiting the link at the end of the HMRC article.
All employers starting to operate PAYE after 6 April 2014, as well as existing employers with 10 or more employees, will need to report each time they pay their employees from April 2014.
This relaxation is part of a package of measures to help micro employers as they move towards full reporting of PAYE information in real time. The package also includes:
- guidance such as ‘Situations where employers will not have to report PAYE information ‘on or before’ the time they pay their employee’ which can be found at the end of the HMRC article and
- ongoing work to develop new ways to report PAYE information on a timely basis, for example using mobile apps.
If you would like any help with payroll issues please do get in touch.
Internet link: HMRC news
Since April 2013 almost all employers must report payroll information online to HMRC when or before any employee is paid. This information includes details of employees, their pay, tax and national insurance deductions.
HMRC had previously recognised that some small employers who paid employees weekly, or more frequently, but who only processed their payroll monthly, may have needed longer to adapt to reporting PAYE information in real time. As a result they had agreed a temporary relaxation of reporting arrangements for small businesses with fewer than 50 employees. This allowed small businesses who found it difficult to report every payment to employees at the time of payment, to instead send the information to HMRC by the date of their regular payroll run but no later than the end of the tax month (5th).
This was originally to apply up to 5 October 2013. However, HMRC have announced that they are planning to extend the temporary extensions to 5 April 2014. After the relaxation period ends all employers will be required to report PAYE in real time each time they pay their employees.
If you feel that you could benefit from this temporary extension please contact Stephen Charles on 0114 2667141 or email firstname.lastname@example.org for further advice.
Disclaimer – for information of users: This briefing is published for the information of clients. It provides only an overview of the regulations in force at the date of publication and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this briefing can be accepted by the authors or the firm.
HMRC would like employers to be aware that they have identified an issue with some employees who have student loans.
A few of the employees in this situation have had their employment status incorrectly ‘ceased’ on HMRC’s PAYE systems and this incorrect information has been passed to the Student Loans Company (SLC).
The SLC have written to these borrowers, querying their employment status. Employees affected by this issue are being asked to reply to the SLC saying they have not ceased or changed employer.
HMRC are hoping to correct their systems in the next few weeks. They have identified that there is an issue getting this corrected information on to the student loans system and are taking steps to resolve this issue.
Internet link: HMRC website
HMRC are writing to the 167,000 employers who have missed one or more of the deadlines for reporting their PAYE information in real time.
The majority of employers should have started to report their PAYE information under RTI from the first payday on or after 6 April 2013. According to HMRC more than 1.6 million employer PAYE schemes, covering over 40 million individual records, are already reporting under RTI.
If you receive a letter and would like help with your payroll procedures, or do not believe you need to report any payments, please do get in touch.
Internet link: Press release
HMRC are advising that they have now fixed the issue with Annual PAYE schemes.
HMRC received a number of requests since April from employers, asking that the status of their PAYE scheme be changed to annual. Due to technical issues they were unable to process the requests at the time. HMRC have now resolved the issue and have accepted all the requests that have been made and changed those schemes to annual. They will not however, be notifying employers that the change has been made.
If you are interested in changing your scheme to annual please do get in touch. However please be aware that under an annual scheme the payroll must meet all of the following requirements:
- all the employees are paid annually (generally only applicable to directors only PAYE schemes)
- everyone is paid within the same, single tax month and
- the employer is only required to pay HMRC annually.
Internet link: HMRC news
HMRC have received a number of requests since April 2013 from employers, asking for the status of their PAYE schemes to be changed to ‘annual’ which is only an option where employees are only paid once a year.
Unfortunately HMRC are currently unable to process requests from employers to:
- move to paying annually and register as an annual scheme
- change their payment frequency.
HMRC expect to have resolved this issue by the end of July and will confirm this on their website in the ‘What’s New’ section. Until that time, if an employer does not pay any employees, they should send in a ‘nil’ Employer Payment Summary by the 19th of each month.
When the fix is in place, HMRC will accept all the requests that have been made and change those schemes to annual. They will then provide information on what action should be taken once the fix is in place.
Internet link: HMRC What’s New