payrollnews PAYE penalties and interest
IN FEBRUARY, HM Revenue & Customs (HMRC) announced that having listened to customer feedback, it 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 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), which were due to start from 6 April 2014, have been postponed. The new timetable will be:
l April 2014 – in-year interest on any in- year payments not made by the due date l October 2014 – automatic in-year late filing penalties l April 2015 – automatic in-year late payment penalties.
Under the new extended timetable employers: l that are late sending their submissions will not be charged late filing penalties as long as they bring themselves fully up to date by 5 October 2014 l that are late with their in-year payments will not be charged automatic late-payment penalties until April 2015. In the meantime, however, HMRC will continue to charge penalties using the current risk-based approach. At the same time, HMRC is continuing to improve its systems and guidance. HMRC’s Director General for Personal
Tax, Ruth Owen, said: “The introduction of RTI [real time information] 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.”
Coding out IN JULY 2013, HMRC launched a consultation exercise with publication of the document How to improve HMRC’s collection of debt: coding out. The consultation ended in September, and in February 2014 HMRC published How to improve HMRC’s collection of debt: coding out – Summary of responses. Draft secondary legislation changing
Every penalty issued carries a right of appeal and, from October 2014, HMRC will be introducing a new facility to allow employers – and agents – to appeal online against RTI penalties using HMRC’s PAYE Online Services. This will enable HMRC to provide a more efficient service, handling appeals automatically in many cases. Appeals may still be made in writing, although it may take longer to get a decision compared to an appeal made online. As now, appeals will not be able to be made by telephone.
In addition, and as planned, from April
2014 HMRC will charge interest on any payments not made by the due date. In practice, it means late payment interest will arise on underpayments and penalties, running from the due date to the actual date of payment. This is different to tax year 2013/14, where interest is only charged when payment for the last month in the tax year is not paid by the due date. The interest accruing will be shown on the business tax dashboard, but – until the debt is agreed between employer and HMRC – the latter will not seek payment of the interest. Repayment interest will also arise on overpayments. There is no appeal against interest charged but, exceptionally, where interest arises due to HMRC error or delay, then the matter may be referred to its Interest Review Unit.
the maximum amount of debt that can be coded out and extending the fifty per cent overriding limit so that it applies to all tax codes and not just prefix-K codes, will be published for comment later in 2014. Work has begun on the necessary changes to HMRC’s self-assessment and PAYE IT systems and processes. It is HMRC’s current intention to introduce these changes to apply from the 2015/16 tax year.
And, briefly… l NINo tracing service – HMRC has
announced that the national insurance number (NINo) tracing service actioned via submission of the form CA6855 is withdrawn with effect 31 March 2014. l SAYE savings – From 6 April 2014, the maximum total amount of a person’s monthly contributions under certified save as you earn (SAYE) savings arrangements, is to increase from £250 to £500. l Employer Bulletin – HMRC has released issue 46 of its Employer Bulletin, which can be found at
www.hmrc.gov.uk/ payerti/forms-updates/employer-bulletin/ bulletin46.pdf. l Generic notifications – Given the new extended timetable for the introduction of penalties (see ‘RTI penalty regime delayed’) HMRC has decided not to issue further late payment and non-filing generic notifications until April 2014 to allow more time to make them more helpful and targeted.
Statutory sick pay: percentage threshold scheme and records THE STATUTORY sick pay (SSP) percentage threshold scheme (PTS) ceases on 5 April 2014. HMRC have confirmed that if employers have any outstanding claims for reimbursement of SSP that has been paid for sickness periods up to 5 April 14, these claims can be made until the close of the 2015/16 tax year by completing either: l an employer payment summary and an earlier year update for a tax year employers were reporting under real time information (RTI) (see
www.hmrc.gov.uk/payerti/reporting/errors/previous-year.htm), or l form SP32 for non-RTI years.
Although the Government is abolishing specific regulations for SSP record keeping, employers will still have the obligation to produce SSP records to show they are meeting their legal SSP obligations, should HMRC require them. However, employers will have the freedom to keep these records in a more flexible manner. More information will be provided in the April edition of the Employer Bulletin.
PayrollProfessional 17
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