HMRC’s PAYE Clamp Down?
Whilst HMRC introduced their new Pay As You Earn (PAYE) system back in April 2013, many businesses are still struggling to get to grips with the new way of submitting payroll information. In response, HMRC will be introducing penalties in October 2014 for any business owners not complying with the new Real Time Information system.
As a leading provider of payroll services, the Hurren Accountant team have helped many businesses throughout the North East embrace the new system, so let us help you so you can avoid these difficult to appeal penalties…
About Real Time Information
The Real Time Information (RTI) system was introduced just last year and automatically revolutionised the way small businesses to large corporations dealt with payroll information. Due to these changes, businesses now have to submit details of pay and deductions on or before the day that they pay their employees.
So what’s changed?
Whilst the wider PAYE system operates in the same way, business owners or their accountants must now use a Full Payment Submission (FPS) to complete this task. These new reports can be generated by your payroll software and your accountant should be clued up on how to use the reports to provide details of the amount you have paid employees, deductions (i.e. Income Tax and National Insurance) and starter or leaver dates.
Unlike the old system, the new Real Time Information system means you will no longer have to submit end of year forms like the P35 and P14 as these details will be submitted as and when they occur via this monthly report. If no payments have been made then you must still submit a report via the Employer Payment Summary (EPS).
Both the FPS and EPS forms must be submitted on time each and every month. From October 2014, if this payroll information is not submitted by the 19th of the month following your payroll process day, then you will be greeted with more than just a slap on the wrist.
HMRC are set to introduce fines of between £100 and £400, and this fine amount will vary based on how many individuals you employ. These fines aren’t just a one-off, these will be billed monthly every time you fail to file your PAYE information. Businesses are liable for up to 11 penalties a year, whilst late payments and filing for three months or more will result in an additional 5% fee.
To prevent these fines from becoming a reality for your business, please contact our team for the most up-to-date advice and payroll services.