HMRC steps up penalties for companies paying PAYE late

10 September 2014

HMRC now includes penalties in real time payments for late payment of PAYE

Companies with 50 or less employees that pay PAYE late are now subject to in year fines (since March 2015). Changes in payments are recorded in real time, instead of at the end of each financial year.

Companies with over 50 employees have faced penalties since October 2014. HMRC have contacted businesses affected by these regulations but are confident these changes in RTI will run smoothly for small businesses.

Companies can appeal the automated penalties if they have a suitable explanation as to why they will be late in paying.

Back in 2015, director of personal tax at HMRC, Ruth Owen, commented, “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”.

This means of course that businesses have to make quick savings if sales fall significantly but staff are kept on in the hope that any fines can be paid at the year end.  However, companies will need to control their cashflow ever more closely which is a good discipline for all. Why not use our daily cashflow spreadsheet downloadable for free.