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Yorkshire businesses to benefit from changes to RTI penalty regime

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Many businesses across Yorkshire will welcome HMRC’s decision to defer the new Real Time Information (RTI) penalty regime for employers that was originally meant to come into force from April this year.

Instead, HMRC will stagger the start of the new in-year late filing and payment penalties to allow time for the new regime to bed in.

From April 6 last year, employers have had to report PAYE information in real time – also known as RTI – meaning each time an employee is paid, details must be submitted about employees’ pay and deductions to HMRC.

Although the use of RTI was supposedly mandatory for all employers that weren’t exempt, HMRC’s own statistics suggest that as many as 30 per cent of employers – nearly half a million – are still not dealing routinely with the new regime.

HMRC had initially planned a new penalty and interest regime for RTI to be introduced from the April 6, but following consultation it has decided to delay this to allow employers time to adapt to real-time reporting. The new timetable for filing and penalties is as follows:

  • April 2014 – interest will be chargeable on any in-year payment of PAYE and NICs not made by the due date.
  • October 2014 – automatic in-year late filing penalties will start. HMRC will pick up late submissions and create automatic warning notices and quarterly penalty notices.
  • April 2015 – automatic in-year late payment penalties, pushing back by a year the plan to penalise employers automatically for paying late.

Lesley Fidler, Associate Director at Baker Tilly in Leeds, said:

We have been concerned for some time about the teething problems HMRC has been having with RTI and the difficulties employers have faced in dealing with it.

“As the new system is not fully bedded in, HMRC has taken the right decision to defer imposing penalties, which will allow more time for the systemic problems to be ironed out.

“This will particularly benefit those businesses across Yorkshire which have struggled to get to grips with the new regime.”

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