Generic messages being sent to classify PAYE schemes for RTI penalties

On Sunday night (21st) HMRC began to send Generic Notices to the 54,000 PAYE schemes it considers to have 50 or more payees and who therefore are in scope for late/non-filing automated penalties from 6th October 2014. Any filing failures this tax year that occurred before 6th October are ignored, as is the first month that there is a filing failure each tax year.

The text of the GNS message for ‘large’ schemes is:

In-year filing penalties start 6 Oct 14

This message is to let you know when in-year filing penalties for tax year 2014-15 could arise if you fail to file your Full Payment Submissions on time or you fail to send us the expected number of returns. We have identified you as having 50 or more employees or pension recipients. This means that in-year filing penalties will apply to you from 6 October 2014. To avoid these penalties, you should make sure all your real time returns are fully up to date by 5 October 2014 and ensure that in future your returns are sent on time and are complete. However, no penalty will arise for the first month in each tax year where there is a filing failure. Details of how filing penalties will operate can be found here www.gov.uk/what-happens-if-you-dont-report-payroll-information-on-time. If you haven’t already done so, we strongly recommend that you set up email reminders to alert you when a notification has been issued using the options available in PAYE Online.

Schemes that consider that they do not have 50 or more payees can appeal their size classification by telephoning the Employer Helpline. Before penalties are issued HMRC will also re-assess the number of payees in a scheme based on numbers on the second Saturday of each tax month so even schemes that are initially notified as being ‘large’ may not receive a penalty if their numbers drop between now and March 2015.

Additionally, any ‘large’ schemes that have had a filing failure in recent months will receive a letter by post this week reminding them of the new compliance regime and the need to avoid future failures. My experience in recent weeks is that there are still a mix of GNS messages sent that defy logic but equally some where the employer/agent is unaware that the FPS file contains one or more ‘payment dates’ that predate the date of submission of the FPS. It is vital that you are aware in what circumstances your payroll software uses a prior period ‘payment date’ as it will not be an accepted appeal to say you did not realise that your software had sent an earlier date: the late reporting reason must be used against each such employee record to disapply the late reporting sanction.

GNS messages to schemes with less than 50 payees will be sent out after those for the 50+ schemes and all messages for both groups should have been received by 26th September. The text of the GNS message to the small and micro employers is:

In-year filing penalties start 6 Mar 15

 This message is to let you know when in-year filing penalties for tax year 2014-15 could arise if you fail to file your Full Payment Submissions (FPS) on time or you fail to send us the expected number of returns. We have identified you as having 49 or fewer employees or pension recipients. This means that in-year filing penalties will apply to you from 6 March 2015. To avoid these penalties, you should make sure all your real time returns are fully up to date by 5 March 2015 and ensure that in future your returns are sent on time and are complete. You may be charged a penalty for not sending your FPS on time or failing to send the expected number of returns between 6 March 2015 and 5 April 2015. Please note that as part of the phased introduction of the new filing penalty regime you do not qualify for the unpenalised failure for the tax year 2014-15.Details of how filing penalties will operate can be found here www.gov.uk/what-happens-if-you-dont-report-payroll-information-on-time.If you haven’t already done so, we strongly recommend that you set up email reminders to alert you when a notification has been issued using the options available in PAYE Online.

HMRC’s penalties and appeals factsheet is here: http://www.hmrc.gov.uk/news/paye-late-pen.pdf