Real time information (RTI) reporting has been mandatory for all employers for five years now, but some employers still misunderstand the need to report on or before the relevant pay day and to pay over the PAYE on time. These are two different deadlines which must both be met in order to avoid penalties.
The Red Lion Trading partnership got this wrong. They claimed, in their appeal against penalties for late filed RTI returns, that as they had paid the PAYE on time the penalties should be removed. The tribunal agreed with HMRC that the late filing penalties had to stand. The judge was clearly exasperated with the employer’s inability to read HMRC’s guidance, as he commented in his judgment:
“The Education letter spelt out the position in words of one syllable: PAYE information must be reported to us on or before a payment is made to an employee or we may charge you a penalty.”
HMRC will do everything it can to educate employers about the correct time to make an RTI report, and we can help our clients to understand that the reporting date is on or before the employees’ contractual payment date.
Where the normal payment date falls over the Easter weekend, the actual payment to employees may be brought forward, or pushed back, because of the four consecutive non-banking days. HMRC has addressed this issue in the latest edition of the Employer Bulletin.
Written by the Tax Advice Network