How to avoid £100 Real Time Information (RTI) Penalties and Fines

5 years ago

Neilson Watts (Associate Product Manager, Sage One Payroll)
By Neilson Watts (Associate Product Manager, Sage One Payroll).

Every now and again I need to kick myself somewhere to get started and I must admit I do love to pull out an inspirational quote…

“Forget past mistakes. Forget failures. Forget everything except what you’re going to do now and do it. ~ William Durant”.

My take on this quote is aimed at those burying their heads in the sand, particularly those who think that RTI (Real Time Information) legislations for PAYE does not impact them or they have misinterpreted HMRCs relaxation rule –  thinking that they don’t have to start submitting RTI returns until April 2016.

Forget your mistakes…get your house in order and start submitting RTI returns now! If not, you are without a doubt at risk of being penalised by the dark overlords (ahem HMRC) from as soon as 6th April 2014.

HMRC Late Filing Penalties

HMRC will penalise you if you are not submitting your Full Payment Submission (the submission made each time you make a payment to an employee) or Employer Payment Summary (the submission made to inform HMRC of a change in your liability or where no liability is due) on time (see HMRC – Late returns for 2014 to 15 onwards).

  • Micro businesses (employing 1 to 9 employees) – £100 monthly penalty (per PAYE scheme)
  • Small businesses (employing 10 to 49 employees) – £200 monthly penalty (per PAYE scheme)

HMRC will issue these penalties quarterly and you have 30 days to pay. If you don’t pay you could incur additional interest rates starting at 3%.

HMRC Late Payment Penalties

For most businesses you must make payments of outstanding PAYE and NIC liability 14 days after the calendar tax month. For example for April (6th April to 5th May), you are required to make the payment to HMRC by the 19th of May.

Late penalties occur on the number of defaults where payments are either not paid in full and/or on time (see HMRC – PAYE/National Insurance late payment penalties).

  • 1 to 3 defaults – 1% of total amount that is late in the tax year
  • 4 to 6 defaults – 2% of total amount that is late in the tax year
  • 7 to 9 defaults – 3% of total amount that is late in the tax year
  • 10 or more defaults – 4% of total amount that is late in the tax year

Avoid penalties by using Sage One Payroll

Sage One Payroll is RTI-ready and in just 4 steps you can run a payroll quicker than I can run 100 metres…from just £5 per month. Try it now for free!