Real time information (RTI) was introduced for the 2013/14 year, requiring employers to submit payroll information electronically to HM Revenue & Customs (HMRC) on or before the date their employees are paid.
One of the core drivers behind RTI was to collect PAYE more quickly. In the past some employers paid over much of their PAYE liability at the end of the tax year, rather than as it fell due. Employers can’t get away with that under RTI as HMRC know exactly what PAYE is due every month, and their Debt Management department will chase it.
Now employers have an even greater incentive to pay PAYE and CIS deductions on time, as interest is being charged for late tax payments which were due on and after 19 May 2014. Where the employer pays electronically the payment is due by 22nd of the month.
However, there is a known problem. Where no Full Payment Submission (FPS) has been made for a tax month a “specified charge” may be placed on the employer’s PAYE account. This charge is appears on HMRC’s business tax dashboard, and interest is calculated on that apparent overdue tax. The specified charge is removed if the employer submits a nil Employer Payment Summary for each of the tax months for which the charge has been raised, but the interest charged is not removed. HMRC say this interest will not be pursued, and this error will be corrected shortly.
This solution assumes that it is possible to submit a nil EPS. We are able to submit nil EPS returns for our clients, but some payroll software packages will not permit a nil EPS to be filed, and require a nil FPS to be submitted before the normal ‘pay day’, even if no employees have actually been paid in the month.
HMRC is sending out automatic warning notices (GNS messages) to employers that have not filed an FPS for the first tax month of 2014/15 (and so need to file a nil EPS). However, employers who closed their PAYE scheme in 2013/14 may have also received GNS messages for 2014/15. This problem is best sorted out by contacting the HMRC employer helpline, which we can do on your behalf.