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Delay in RTI Automated Penalties

Delay in RTI Automated Penalties

HM Revenue & Customs (HMRC) has announced a delay in the introduction of automated RTI penalties that were due to commence from April 2014. The announcement follows concerns that RTI was not yet providing a reliable enough service to support the automation of penalties for unpaid PAYE and NICs.

The new timetable for RTI penalties will be as follows:

  • from April 2014, interest will be payable on in-year payments of PAYE and NICs not made by the due date;
  • from October 2014, in-year automated penalties for the failure to file RTI reports on time will come into force;
  • in April 2015, in-year automated penalties for late payment of PAYE and NICs due will be introduced.

HMRC say that the change to the penalty timetable for RTI has been made in order to “give employers more time to adapt to reporting in real time”, and that “HMRC is continuing to improve its systems and guidance.”  HMRC’s statement emphasises the need for more time to allow employers to adapt to RTI reporting before penalties are introduced as the key reason for this delay.

However many professional bodies and other concerned stakeholders still have concerns about underlying issues with RTI systems and believe that the problems with RTI are not just related to employers needing to adapt but that there are shortcomings in HMRC’s systems.

HMRC believe that RTI is going extremely well for the majority of employers and the delay in introducing penalties will ensure that improvements HMRC have made to their internal systems are working. They also believe this will give them more time to provide better customer support to employers who need more time to adapt to the provisions of RTI.

Manual penalties for late payment of PAYE and NICs will continue to be issued by HMRC in 2014-15, as in previous years.  There will also be a late filing penalty if employers fail to file their final RTI submissions for 2013-14 on or before the last payday of the tax year, which ends on 5 April 2014.

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