Talking to your clients - Help clients avoid PAYE pain - By Mark Morton

  • Mark Morton
  • 5 February 2014 00:00

Now that the dust has settled post-January, it may be worth educating certain clients regarding basic PAYE requirements i.e. filing and paying.


From April 2014, existing employers with nine or fewer employees who need more time to adapt will be able to report PAYE information on or before the last payday in the tax month until April 2016. This is clearly narrower than the current relaxation relating to employers with less than 50 employees, which comes to an end in April 2014.

All employers starting to operate PAYE after 6 April 2014, as well as existing employers with 10 or more employees, will need to report each time they pay their employees from April 2014.

In addition, HMRC are intending to implement penalties for late-filed RTI returns from the same date. HMRC current proposals are that, an employer who, during a tax month, fails to make a return on or before the filing date will be liable to a penalty as follows:

• 1-9 employees - £100;

• 10-49 employees - £200;

• 50-249 employees - £300; and

• 250 or more employees - £400.

This includes annual schemes.

An exclusion for new start-ups is to 30 days i.e. a new employer will not receive a late filing penalty provided the first RTI return is filed within 30 days of making the first payment to an employee.

A payment tolerance, which will not incur a late payment default, will be set at £100, so where an employer pays over a sum that is within £100 of the total shown as due to HMRC from the RTI returns filed for the tax period, no late payment default (or late payment penalty if applicable) will arise.

Late PAYE payment

Of course, this flags up the whole area of PAYE late payment. There have been numerous Tribunal cases about this issue. Basically, there are two grounds for appeal, either a reasonable excuse or special circumstances. In the vast majority of the cases, the taxpayers' have not been successful in their appeals.

So, it may be a good time to give a gentle reminder to some of your payroll clients!

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