HMRC listen to payroll profession and announce delay in RTI penalty regime

12 February 2014

HMRC has just announced that there will be a staggered start to the introduction of Real Time Information penalties.

The new automatic in-year Pay As You Earn (PAYE) penalties for late filing and late payment and in-year interest (charged on tax and National Insurance Contributions (NICs) that are paid late during the year), were due to start from 6 April 2014.

Real Time Information (RTI) is a big change and HM Revenue and Customs (HMRC) and some employers are continuing to learn. Having listened to customer feedback, HMRC has decided to stagger the start of the new in-year late filing and payment penalties to give employers more time to adapt to reporting in real time. The new timetable will be:

  • April 2014 - in-year interest on any in-year payments not made by the due date
  • October 2014 - automatic in-year late filing penalties
  • April 2015 - automatic in-year late payment penalties.

At the same time, HMRC is continuing to improve its systems and guidance.

HMRC has worked closely with the Department for Work and Pensions (DWP) to ensure that RTI will support the operation of Universal Credit, which brings together means-tested in and out-of-work benefits.

HMRC’s Director General for Personal Tax, Ruth Owen, said:

“The introduction of RTI is going extremely well for the majority of employers but there are still some who need a bit of time to adapt fully to the changes. This additional time will give us the opportunity to ensure that improvements to our internal systems are working, to learn from them and to provide better customer support to employers who need more time to adapt.”


CIPP comment

The CIPP is delighted the Minister, David Gauke and HMRC has listened to the concerns of the payroll profession and welcomes the delays to the RTI penalty regime. We fully support the 6 month delay of the filing penalties and the 12 month delay for the late payment penalties. This additional time will allow both employers and HMRC to iron out all the teething problems being experienced by employers, particularly around the payment reconciliation process without the fear of financial implications. The CIPP is supportive of real time information but it has to be fit for purpose and whilst employers are grappling with queries around what HMRC believes it has received versus what the employer has sent, it was crucial further time was given to sort these issues out. The CIPP also hopes this will allow more time to improve the dashboard employers use to see where payments have been allocated.

The CIPP would like to extend a big thank you to all those who took the time to complete our survey on this subject. Without this type of evidence to present to HMRC, it is extremely challenging to contest decisions which we know will be detrimental to the profession.

You can read the views of respondents and the full CIPP response to HMRC through our news item below.

The CIPP lobbies HMRC to delay RTI penalty regime - 23 January 2014