PAYE pain?

We talked earlier this year about the possible regime for RTI penalties. However, further changes also start to impact upon PAYE compliance for this tax year 2014/15 and onwards.

New interest and penalties

• April 2014 - in-year interest on any in-year payments not made by the due date;

• October 2014 - automatic in-year late filing penalties; and

• April 2015 - automatic in-year late payment penalties.

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.

Employers will be able to see the amount of interest accruing in their online tax account but HMRC won't seek payment until the debt is settled.

From April 2014 HMRC will introduce a new RTI 'Late Reporting Reason' data item which will allow employers to tell HMRC why they are submitting data late.

HMRC will still issue late payment penalties manually in 2014/15, as in previous years. This potentially includes the issue for earlier years. In future, these penalties will be automated.

Level of penalties for late RTI returns

For the purposes above, an employer who, during a tax month, fails to make a return on or before the filing date will be liable to a penalty as follows:

• 1-9 employees - £100;

• 10-49 employees - £200;

• 50-249 employees - £300; and

• 250 or more employees - £400.

This includes annual schemes.

Make sure your clients understand these changes so that they don't come a cropper!