HMRC Penalties for Late PAYE Filing
RTI returns for PAYE are simply explained: RTI means ‘Real Time Information’, and this means that HMRC must be informed every time an employer pays their employees, rather than accumulating the information until the financial year end. The RTI system came into effect, starting in 2012 with every company coming on board by 2013. While some leeway was allowed initially, there is the risk of incurring a late PAYE filing penalty for those who file their returns unacceptably late. In general, a Full Payment Schedule or FPS must be made to HMRC on or before the monies are passed to the employee. This means that there is little leeway in making the return as few employees will tolerate being paid late in order to allow extra time for the paperwork to be completed. One factor to bear in mind is that the tax office can show leniency to employers who are in constant communication about any issues regarding their late filing: giving clear notice that the filing will be late and why (there must be a valid reason, such as serious illness of the person in charge of filing the return), in short, having a genuine reason for the delay and being in communication with the tax office, and, obviously, making a plan for prompt payment.
Rules and Regulations
All returns can be made up to three days late, after which, some examples of a late PAYE filing penalty would be to have to pay a fine as well as the amount that is due: fines can be apply to anything late returns (both monthly and annual), to incorrectly filed returns, to late or incorrect payment of the monies due to HMRC. The fine ranges from £100 (one hundred pounds) for micro-businesses – those employing 9 people or less – to £400 for companies employing over 250 people. There is also the risk of an additional charge of five per cent of the tax due to be paid. This can add up to a substantial sum and eat up much of the businesses profit margin, so it is best avoided if possible. A good way to avoid such charges is to hire an accountant who will take care of the paperwork filing for you.
What You Can Do To Avoid a late PAYE Filing Penalty
MCC Accountants, Salford based accountants, specialise in tax returns and can ensure that all your paperwork is completed and submitted, correctly and on time. So, if you are looking for a Salford based accountants consider MCC Accountants for all your accounting needs!