The must read – How can you avoid RTI Penalties and Fines?

5 years ago

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

At work I often work by the rule that it’s always easier to seek forgiveness than ask permission. I find it works getting around political red tape but unfortunately the dudes in suits at HMRC don’t work that way.

There are some simple things you can do to help you avoid the impending thud of a HMRC Penalty Notice hitting your doormat…

Try to be accurate

Mistakes can and do happen. (Even the infallible dudes at HMRC have been known to make them occasionally).

HMRC penalties for mistakes can often depend on how it happened.  If you took reasonable care, or were careless but reported the error without being prompted by HMRC…you might not be penalised at all.

Take time and care in your payroll calculations. Invest in using commercial payroll software such as Sage One Payroll will automate your PAYE and NIC calculations whilst seamlessly sending your RTI return as part of paying your employees.

Do it on-time. Don’t be late!

The absolute RTI rule is to make the submission ‘on or before you make the payment’ – so if you pay your employees on a Friday, make sure you make that Full Payment Submission on a Friday.

Pay what you owe, keep your eye on your cash flow

In the days of black and white telly and proper music, the HMRC only really knew about the true amount you owed them for outstanding PAYE and NIC liability once a year, giving you the flexibility of creative accounting of underpaying and overpaying to help with your cashflow.

Under RTI you are submitting every time you make a payment to an employee. HMRC NOW KNOW exactly what you owe them and they expect you to pay it on time.

Don’t pass the buck!

It does not matter if you do the payroll yourself in-house or you choose to outsource to your accountant, bookkeeper or payroll bureau – the HMRC simply see that it’s your business that is liable to any fine or penalty.

If you do outsource

Help your outsource provider by helping yourself first. Make sure you provide them with timesheets or the figures you want to pay your employees with plenty of time to spare.

REMEMBER! It’s still your business that is liable to the penalty…not your outsourcer provider.

Avoid penalties by using Sage One Payroll

Sage One Payroll is RTI-ready, is so simple to use, and in just 4 steps you can run a payroll quicker than I quote the alphabet…from just £5 per month with free 24/7 telephone support. Try it now for free!