Penalties If You Fail To Report Payroll Information On Time

The Government’s official website has recently provided an update on behalf of HMRC with regards to how to avoid payroll penalties.

HMRC has introduced penalties, which will be issued to those employers who fail to report their payroll information on time. Essentially, if you’re an employer with over 50 employees and you submit your payroll information late, from October 6th 2014 you could receive a monthly penalty charge of £300. With regards to employers with fewer than 50 employees, these penalties will not come into play until March 6th 2015.

If you are a new employer and you sent your first Full Payment Submission (FPS) within 30 days of paying an employee, HMRC will not charge a penalty. Similarly, if it’s the first time you have failed to send a report on time in this tax year you won’t be charged. However, this is not applicable to employers with fewer than 50 employees for the tax year 2014-2015.

The amount you pay depends on how many people you employ. For example, if you employ between one and nine people, you’ll be charged a monthly penalty of £100. If you have over 250 employees, you will pay £400 a month in penalties. If you are more than three months late, you could be charged an extra penalty of 5% of the National Insurance and tax that should have been reported.

HMRC sends out penalty notices in July, October, January and April. This notice will state what is owed, how you can pay the penalty and what to do if you want to appeal HMRC’s decision to issue you with a penalty. You can appeal if you believe the penalty is not due, the amount of the penalty is incorrect, or you have a “reasonable excuse” for sending your reports late.