Late real time information penalty scheme to remain until April 2017

2 June 2016

Following a review by HMRC, the existing penalty scheme under Real Time Information (RTI) has been extended to April 2017. The scheme was due to end on 5 April 2016, however due to a significant reduction in late returns over the past year, the three day easement and risk assessed approach will now continue until 5 April 2017.

The automatic late filing penalties for RTI were scheduled to take effect from 6 October 2014 for employers with 50 or more employees, and 6 March 2015 for all other employers.  However this automatic function was disabled, and HMRC decided to risk assess late filing penalties, especially with regard to small businesses and individuals.

Now the risk based approach will continue until 5 April 2017. Until then, only employers who have persistently filed their full payment submissions late for several months will be issued with penalties. In addition, HMRC will ignore all late filing of full payment submissions made within three days of the payment date until 5 April 2017.  However, employers that regularly file after the statutory filing date, but within the three day period, will be monitored by HMRC and could be contacted to warn them of future penalties.

Although the existing penalty scheme will remain in place until 5 April 2017, beyond this date HMRC will continue to review their approach to late filing penalties in line with their wider review of penalties.  The focus of this review is to penalise those who deliberately and persistently fail to meet statutory deadlines, rather than those who make occasional and non-deliberate mistakes.

If you have any concerns regarding RTI penalties, or wish to discuss any of the above further, please don’t hesitate to contact your local UHY tax expert.