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Risk-based penalties to continue

RTI penalties to remain risk assessed

HMRC has again reviewed the effectiveness of the risk-based approach to late filing PAYE penalties and have decided to continue this approach for the tax year beginning 6 April 2017.

This means that late filing penalties will continue to be reviewed on a risk-assessed basis rather than be issued automatically. The first penalties for the tax year beginning 6 April 2017 will be issued in September 2017.

The approach will also include continuing to not charge penalties if Full Payment Submissions (FPSs) are filed late but within three days of the payment date and there is no pattern of persistent late-filing. This is not an extension to the statutory filing date which remains unchanged. Employers are still required to file their submissions on or before each payment date unless the circumstances set out in the ‘sending an FPS after payday guidance’ are met. Employers who persistently file after the statutory filing date but within three days, will be monitored and may be contacted or considered for a penalty.

Late payment penalties will also continue to be raised on a risk-assessed basis rather than automatically again, focussing on penalising those who persistently pay late and are of greatest risk.

HMRC will continue to review their approach to PAYE penalties beyond 5 April 2018 in line with the wider review of penalties and will continue to focus on penalising those who deliberately and persistently fail to meet statutory deadlines, rather than those who make occasional and genuine errors for which other responses might be more appropriate.

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