HMRC renews RTI penalty concession

In April 2016 two concessions which gave employers leeway if they submitted RTI reports late came to an end. However, HMRC has recently had a partial change of heart. What’s the full story?

Penalty recap. To help employers avoid penalties for late RTI reports, i.e. those submitted after the date they paid their employees, HMRC introduced two concessions. These meant that HMRC would not pursue a penalty where:

  • a report was not more than three days late; or
  • employers with no more than nine workers on the payroll could report just once a month regardless of when they paid their employees.

When we reported the end of the concessions we also mentioned that HMRC had failed to update its guidance about the changes and anticipated that it would come under pressure to do so.

Concession renewed. Somewhat late in the day HMRC has issued its guidance, “What payroll information to report to HMRC”, which includes good news for employers. It’s decided to extend the first of the concessions listed above until 5 April 2017. It applies retrospectively from the start of 2016/17.

Penalty let-offs. Aside from the extended concession there are other situations where HMRC won’t apply penalties for late RTI reports. For example, if you make an ad hoc payment to an employee outside your regular payroll. The employer guidance has been updated on how to notify HMRC in these situations.

Tip. There are now seven different codes (A,B,C,D,F,G and H) that you can enter when you submit a late RTI report to prevent a penalty notice. HMRC’s guide gives details of the circumstances when to use each one. It also provides a useful summary of information needed for RTI reports.

HMRC has extended the concession not to charge penalties for RTI reports which are no more than three days late. It automatically applies from 6 April 2016 and will continue for the whole of 2016/17.