Limited company contractors need to be aware of new Real Time Information penalties
Smaller sized UK businesses, such as Limited companies, need to be aware of new phased in RTI penalties for late filing returns.
Employers who employ less than 50 members of staff will experience automated penalties for late Real Time Information (RTI), as from 6th March 2015. Those with more than 50 employees will face in year penalties starting from next month.
Employers will be able to appeal against any fines by using HM Revenue & Customs’ new online process for automated penalties.
Ruth Owen, HMRC Director-General for Personal Tax, said, ”Real Time Information is working well. Our most recent figures show that over 95 per cent of PAYE schemes making payments to individuals are successfully reporting in real time, and 70 per cent say that it is easy to do.
“We know from our experience of rolling out of RTI that to ensure a smooth transition for our customers it’s best to introduce changes in stages. This will allow us to update our systems and enhance our guidance and customer support as needed. We know that those who have had most difficulty adjusting to real-time reporting have been small businesses, so this staged approach means they have a little more time to comply with the new arrangements before facing a penalty.
“We believe this is the best approach for HMRC and our customers, as we all get used to the new in-year penalties.”
Colin Ben-Nathan, Chairman of the Chartered Institute of Taxation (CIOT) Employment Taxes sub-committee, also commented, “The Institute welcomes this delay until March 2015 as regards the issuing of automated PAYE RTI late filing penalties for small employers. Smaller employers, in particular, need a longer period of time to adjust to PAYE and other administrative changes because they have very limited resources which are primary geared to servicing their clients and customers. So it is encouraging to see that the Government have recognised this point in the present circumstances.
“However, we think that HMRC still has work to do in ensuring the accuracy of automated generic notification messages to employers. An improvement in the accuracy of the late filing, non-filing and late payment messages would not only reduce the volume of penalties issued in error by HMRC, but would also reduce the number of appeals that inevitably result from this.”
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