Companies with one or more employees must report their payroll information each month. Filing your payroll information is important as it allows HMRC to calculate the correct amount of PAYE that you owe – and HMRC has penalties in place for late or non-filing PAYE information. Here, the team at AMR Bookkeeping Solutions discusses the consequences of not reporting your payroll information on time, and how companies can submit an appeal if they feel they have been wrongly charged.
When can HMRC give a penalty?
- You submit your Full Payment Submission (FPS) late
- You did not send the expected number of FPSs
- You did not send an Employer Payment Summary (EPS) if you didn’t pay any employees in a tax month
You won’t receive a penalty for late submission if:
- Your FPS is late, but all the reported payments on the FPS are within 3 days of your employees’ pay day. (Although if employers regularly file after the payment date but within 3 days, they may be contacted or considered for a penalty)
- You are a new employer, and you sent your FPS within 30 days of paying an employee
- It’s the first time in the tax year that your business has not reported on time. (This doesn’t apply if you are registered with HMRC as an annual scheme)
How much is the penalty?
How much money you pay will depend on how many employees you have. Businesses who run multiple PAYE schemes simultaneously can be charged for each scheme.
- 1-9 employees: £100
- 10-49 employees: £200
- 50-249 employees: £300
- 250+ employees: £400
What happens if you get a penalty?
HMRC will send penalty notices every quarter. The notice will tell you what you owe, how to pay the penalty, and how you can appeal your penalty.
The penalties do accrue interest; however, you will not be charged any interest if you pay the penalty within 30 days.
You can pay an HMRC late payment or filing penalty here.
Appealing a penalty
HMRC will consider a penalty appeal if:
- You believe the penalty is not due
- The amount of the penalty is wrong
- You had a reasonable excuse for late filing e.g. bereavement, ill health, theft or crime, natural disaster
Employers can appeal online using the HMRC PAYE for employers service, or send an appeal in writing to:
- National Insurance Contributions and Employers Office
- HM Revenue and Customs
- BX9 1BX
HMRC also calculates what you owe them
If you have not submitted your payroll information on time, you may receive a specified charge based on how much HMRC estimate that you owe. This will be based on your previous PAYE payment and filing history.
By submitting the FPS for each month you have missed, the specified charge will be replaced with the actual amount that is due for each month.
What happens if my report was inaccurate?
In the case of inaccurate reports, HMRC can deliver fines for anything they perceive to be a careless or deliberate error. The sum of any penalty they give will be decided upon after reviewing the behaviour that caused the error, and the potential tax revenue lost.
If an error has arisen despite taking reasonable care, HMRC do not give a penalty.
For more information, read HMRC’s penalties for inaccuracies in returns and documents factsheet.
If you would like help with payroll reporting, or any other aspect of your business’ payroll tasks, we’d love to hear from you. You can give us a call on 01892 559480 to chat with our friendly team, or get in touch via our online enquiry form.
