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RTI penalties to be staggered, HMRC confirms

THE IMPOSITION of penalties relating to real-time PAYE submissions is to be staggered, HMRC has confirmed.

Real-time PAYE - also known as RTI - sees PAYE reported on or before the date payment is made, while changes will be reported as and when they occur, rather than at the end of the financial year. Changes in circumstances - such as a pay rise, promotion or departure from job - are reported as they happen.

Several key government policies, including the introduction of Universal Credit and the £2,000 National Insurance allowance are dependent on the ability to calculate PAYE in real-time.

Having listened to stakeholder feedback, HMRC has decided to stagger the start of the new in-year late filing and payment penalties to give employers more time to adapt to reporting in real time. The new timetable will see in-year interest on any in-year payments not made by the due date commence from April 2014, with automatic in-year late filing penalties from October. April 2015 will see automatic in-year late payment penalties introduced.

ICAEW tax faculty chair Paul Aplin said: "HMRC have really been in listening mode on this. Businesses are getting to grips with running RTI and we felt it was important to get a full year of operating it before bringing in penalties."

He added it was important to allow businesses to view the same RTI dashboard as HMRC, with the business dashboard currently updated twice a month.

HMRC director-general for personal tax Ruth Owen said: "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." (12 Feb.2014)


Taxman relaxes real-time PAYE requirements for SMEs

THE TAXMAN has temporarily eased new real-time PAYE requirements for small businesses.

New rules from April will see real-time PAYE reporting rolled out in the UK. But businesses employing fewer than 50 people struggling with increased frequency of PAYE filings to HMRC will have a longer period to file.

The ‘easement' will be in place until 5 October 2013 in order allow smaller employers to catch up, particularly if the employers pay their employees weekly, or more frequently, but only process their payroll monthly.

HMRC said it will "continue to work with employer representatives during the summer to assess and understand the impact of RTI on the smallest businesses" and "consider whether they can make improvements to real time reporting which will address their concerns without compromising the benefits of RTI".

Concerns had been raised over the requirement for PAYE to be reported "on or before" the date payment is made, while changes to circumstances will be reported as and when they occur, rather than at the end of the financial year.

In November 2012, head of the ICAEW's tax faculty Frank Haskew and faculty chairman Paul Aplin told MPs the obligation is "at best, unrealistic and at worst, impossible" for SMEs.

However, Aplin today welcomed HMRC's concession, adding that HMRC had "listened".

He said: "Having raised the issue with the Treasury Committee, with ministers and with HMRC over recent month this is the solution I was looking for: employers who report monthly but who were faced with weekly - or worse - reporting under RTI can now breathe a sigh of relief.

"Small businesses have been spared a new and unnecessary burden because ministers and HMRC listened. Now we have to use the next six months to secure a permanent solution. I am confident that we will be successful. "

The additional six months will allow stakeholders to gauge better what allowances need to be made to SMEs, CIoT president Patrick Stevens said.

He said: "By October 2013 we should have a clearer idea of what concessions small business will require for RTI to work effectively for the good of all. And then we can have a sensible dialogue with ministers and officials about how to build what we have learned into the design of RTI and universal credit in future."

Real-time PAYE reporting for businesses larger than 50 employees will be rolled out nationally from April, with four million individuals currently reporting their pay using the scheme. (19 Mar.2013)


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