HMRC delay the introduction of RTI penalties

Real time PAYE (RTI) was introduced in April 2013 for all employers. All payroll changes and amounts due are now reported as they occur rather than at the end of the tax year.

This was a major change to the way employers wages were processed and some had problems with the introduction if they were not using a payroll software provider.

To ensure compliance HMRC had originally intended to introduce late filing and late payment penalties from April 2014. However the implementation has not been without problems as there have been errors and technical issues with HMRC’s systems. This has led to late filing notices being issued incorrectly and payments not showing on the HMRC website.

As a result HMRC have announced that the introduction of penalties will be delayed. In year interest on overdue payments will commence from 6 April 2014, late filing penalties start from October 2014 and late payment penalties from April 2015.

Whilst it is a relief that HMRC are listening to concerns over RTI and delaying the introduction of automatic penalties it can only be hoped that they can resolve the system problems before they start sending out penalty letters.