Smaller employers not to receive automatic fines for late PAYE filing from HMRC

Monday 22 June 2015

HM Revenue & Customs (HMRC) will not be automatically issuing fines to those who have missed the deadline for submitting PAYE details, it has been announced. Smaller employers and contractors will benefit from the change, which is said to being given a more proportionate approach to the situation.

The Association of Taxation Technicians (ATT) has praised the move as a positive step forward. Employers with more than 50 staff will be issued with fines for late-reporting, but a new risk-based approach by HMRC will see two batches of late submissions affected. Those with fewer than 50 employees will no longer be handed an automatic fine for filing later than March 6th 2015.

It is thought that the reason behind this announcement is due to limited resources at HMRC's disposal. With hundreds of thousands of fixed penalties automatically issued each year for relatively small amounts of money, it takes a lot of time and manpower to chase them up.

HMRC said in a statement: "This approach will enable HMRC to concentrate more resources on the more serious failures to comply, and to focus on educating employers about their filing obligations through targeted communications, webinars and Employer Bulletin articles."

Those who are late by three days or less will therefore avoid an automatic fine of £100 in what Natalie Miller, president of the ATT, said was a pragmatic approach. She added that it was important that any business that was filing late for the first time have the period of grace explained to them.

Ms Miller reinforced this when she said: "If HMRC do not explain their approach then there is the concern that some of these employers may end up becoming serial late filers because they will see the penalty system as an empty threat."

HMRC is looking to monitor the effect of changing the rules and not issuing automatic fines to late PAYE filers who have a reasonable excuse. This will result in a review in April 2016, which will help to influence the approach moving forward.


By Victoria McDonnell

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