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HMRC announces new timetable for RTI penalties

HMRC has decided to stagger the start of new, automated, in-year late payment and filing penalties, to give HMRC and employers more time to adapt to reporting in real time.

The vast majority of employers are now routinely reporting PAYE in real time and most of them – around 70% - have told HMRC that it is either very or fairly easy. However, operating PAYE in real time remains a big change, with both HMRC and employers continuing to learn and adapt to it.

In response to concerns expressed by employers about introducing automated in-year penalties in 2014-15 HMRC has confirmed that it will introducing them in stages.

HMRC will introduce the new penalties in stages:

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

You can read more about this at

Late filing

Introducing in-year late filing penalties from 6 October means that employers who bring all their submissions for the period 6 April - 5 October 2014 up to date by 5 October will not face any in year late filing penalties.

This additional time will:

  • Give those employers who will be reporting on or before payment for the first time or who join RTI in April 2014, more time to adapt.
  • Allow customers and HMRC to test and get used to the new FPS ‘Late Reporting Reason’ data item. This will allow employers to tell HMRC why they are submitting data late – for example if they are correcting an earlier submission.

HMRC is working closely with the Department for Work and Pensions so that their approach to ensure that employers send their PAYE information on time supports Universal Credit. Reporting on or before the date employers pay their employees is necessary to ensure an accurate Universal Credit award.

Late Payment

Introducing automated in-year late payment penalties from April 2015 will help those employers, who are trying their best to comply, but are still having difficulties reconciling what they think is due each month with what HMRC thinks is due.

Again learning from experience, HMRC is currently reviewing the main causes of difficulties and misunderstandings and enhancing their systems, for example, to automatically correct some types of common employer errors.

These enhancements will provide additional safeguards which, together with updated guidance, should bring improvements by summer.

Please note however:

  • HMRC will still issue late payment penalties manually for 2014-15 as they have done in previous years.
  • In-year interest will apply on all amounts unpaid by their due date from 6 April 2014 as planned. As with other taxes, HMRC will calculate interest daily. HMRC won’t seek payment of interest until the debt is settled. However, employers will be able to see the amount of interest accruing on the Business Tax Dashboard and on any letters HMRC send seeking payment of the underlying unpaid amount.

Generic Notification Service (GNS) messages

HMRC has heard the concerns you have expressed about the accuracy, timing and wording of some of thier GNS messages.  Given the extended timetable for the introduction of penalties, they have decided to suspend the issue of thier late payment and non-filing GNS messages until April 2014 to allow them to make some further improvements to the messages while still allowing employers to get the benefit of the GNS notices ahead of the introduction of penalties. 

Other points to note

  • Employers may still be charged a late filing penalty if they do not comply with their obligations relating to the final return of the 2013-14 tax year. There’s more information at and HMRC will be publishing a separate What’s New about this shortly.
  • HMRC appreciates that the vast majority of employers try their best to file and pay on time. And because they want employers to pay and file on time correctly, they understand that it is important to make sure all the changes that reporting in real time brings are working properly before they start to introduce penalties. But to be fair to all their customers, HMRC will take robust action to collect genuine debt. The introduction of in-year interest on in year late payments from April 2014 will support this.

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