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Revenue publishes guidance on PAYE Real Time penalties

HM Revenue & Customs (HMRC) has published guidance on the penalties for filing late and inaccurate returns, for employers operating PAYE via Real Time Information (RTI).

The new RTI regime comes into effect in April 2013, and will require employers to submit information to HMRC about the payments and deductions they have made under PAYE, at or before the time of payment.

HMRC has now confirmed that for the tax years 2012/13 and 2013/14 there will be no change to the existing penalties for late filing of returns, and there will be no penalties if in-year Full Payment Submissions (FPSs) are submitted late. However, penalties may be charged after the end of the tax year, based on the final FPS for the year.

Employers must submit an FPS every time they make a payment to an employee. To avoid a late filing penalty, the final FPS for an employee must be reported by 19 April. After 19 April, employers can submit an Earlier Year Update by 19 May to avoid a penalty.

Employers who do not pay any employees in a tax month must send an Employer Payment Summary by the 19th of the following tax month.

Meanwhile, for 2012/13 penalties will not be applied for inaccuracies found within the in-year FPS. However, they may be charged after the end of the tax year based on the final FPS for the year.

Penalties may also apply for inaccuracies found within the in-year returns for the 2013/14 tax year, using existing criteria.

From April 2014, late payment penalties will be charged automatically.

We can help with your PAYE needs – please contact us for further advice and assistance.