With the introduction of Real-Time Information (RTI), deadlines for payroll have become much more complicated. In this blog, I will address all of the deadlines and penalties associated with running payroll for your business.
Deadlines and penalties for filing
The Full Payment Submissions (FPS) must be filed on or before the day that you pay your employees. The penalty for failing to do so depends on how many employees you have. This begins at £100 for up to 9 employees, £200 for up to 49 employees, £300 for up to 249 employees and £400 for employers with over 250 employees. These penalties are applied monthly so they will increase if you continue to be late.
If you end up being three months or more late, an additional penalty amount of 5% of the tax and National Insurance Contributions (NICs) you should have reported will be added on top.
There are circumstances where you can avoid a penalty for late filing, the full list of which can be found on this link.
If you run more than one payroll scheme you can be charged separate penalties for each.
Deadlines and penalties for paying HM Revenue and Customs (HMRC)
Every month you will need to pay HMRC any amounts of tax and NICs which you have deducted from employees pay. The deadline to do this is the 19th of the following month if paying by a cheque in the post or the 22nd if paying electronically.
Payments can be made electronically by clicking this link. You will need a credit/debit card and your account’s reference number, which can be found on certain PAYE documents and correspondence.
Failure to pay on time doesn’t result in a penalty, instead, interest will be charged on the amount until it has been paid.
If you do not file an FPS or an employer payment summary (EPS) to show that there have been no payments made, HMRC will estimate the amount of tax you owe by looking at previous data.
These charges do not replace the need to file your FPS or EPS. The only way to remove them is to file the missing payment periods which will replace the charges with the correct amount to pay HMRC.
If you instead choose to update figures and file the following month’s FPS or EPS, the charges will remain and need to be paid.
HMRC will issue penalty notices quarterly (every three months). These notices will include how much you owe, how to pay and what you can do if you disagree with the penalty.
Interest is charged on penalties if they are not paid within 30 days of the notice date.
You can send an appeal to this address if you do not believe you should pay a penalty.
Customer Operations Employer Office
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Newcastle Upon Tyne
If you would like any more information on the above, or with payroll in general, please do not hesitate to contact us.