In April 2013, HM Revenue & Customs introduced new payroll reporting procedures, requiring payroll to be reported in real time. So now, whenever an employee is paid (or in advance of the employee being paid) details must be reported to HMRC.
The penalty-free period is over on 6 October 2014
For those who employ 50 or more employees, HMRC offered a ‘soft landing’ period until 6 October 2014, meaning they wouldn’t penalise employers for late reporting under the new scheme. Employers with fewer than 50 employees penalties start from 6 March 2015.
After this date, HMRC may issue a penalty where:
- The payroll has not been reported as they would expect e.g. no return submitted where they would have expected one; or
- HMRC have not been informed that no employees are being paid in that particular period e.g. no Nil submission has been made.
How much is the penalty?
- Late submission – fixed rate penalty
It depends on the number of employees within the PAYE scheme, as follows:
| Number of employees | Monthly filing penalty per PAYE scheme |
| 1 to 9 (no penalty until 6 March 2015) | £100 |
| 10 to 49 (no penalty until 6 March 2015) | £200 |
| 50 to 249 | £300 |
| 250 or more | £400 |
Penalty notices will be issued quarterly in October, January, April and July and HMRC will use the latest information available to determine the number of employees.
- Late payment of PAYE – penalty is a % of the PAYE due
Do bear in mind that PAYE payments are due to HMRC by the 19th of the following month (or the 22nd if paid electronically). Whereas HMRC would previously charge interest on late PAYE payments at the end of each tax year, they now charge a tax-geared monthly penalty as follows:
| Number of defaults in a tax year | Penalty percentage | Amount to which penalty percentages apply |
| 1-3 | 1% | The total amount that is late in the relevant month or quarter |
| 4-6 | 2% | |
| 7-9 | 3% | |
| 10 or more | 4% |
All penalties must be paid 30 days from issue. Penalties not paid on time will attract interest at the official HMRC rate.
What if you have no payments or employees to report?
You must still file a NIL submission to HMRC, or HMRC will charge a late submission penalty.
If you need more advice… please call us
At BKL, we are here to help with advice and guidance or processing your payroll on a regular basis to help relieve you of the burden.
For further information and useful links: