Micro-employers are now subject to HMRC’s late RTI payroll submission penalties

Emily Coltman

Chief Accountant

HMRC has updated its guidance on what happens when employers fail to report their business’s payroll information on time. Here’s what you need to know:

What’s changed?

Employers must send their RTI forms to HMRC on or before the day they pay their staff and penalties for late RTI submission have been in force, in one form or another, since 2014.

Up until 5th April 2016, however, a concession applied to ‘micro-employers’ (those with nine or fewer employees). If these business owners submitted their completed and accurate RTI forms to HMRC online by the end of the tax month in which they’d paid their employees, they wouldn’t be charged a penalty.

This concession was abolished on 6th April 2016 and the penalties for late RTI submission now apply to all employers, including those with nine or fewer employees.

What does this mean for employers?

All employers must now submit their completed and accurate RTI forms to HMRC online either on or before their staff’s payday. Failure to do this could result in penalties, which start at £100 per month, although employers will not be charged for their first breach in a tax year.

While HMRC has said that it won’t charge a penalty for RTI forms submitted up to three days after payday, it’s worth noting that it has also said that employers who persistently take advantage of this exception “may be considered for a penalty”.

If you’re an employer, this all means that it’s more important than ever to file your payroll on time.

Disclaimer: The content included in this blog post is based on our understanding of tax law at the time of publication. It may be subject to change and may not be applicable to your circumstances, so should not be relied upon. You are responsible for complying with tax law and should seek independent advice if you require further information about the content included in this blog post. If you don't have an accountant, take a look at our directory to find a FreeAgent Practice Partner based in your local area.

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