Groundhog Day is celebrated on 2 February in Pennsylvania, but HMRC thinks it falls on 17 February in the UK, as once again they have changed the conditions for RTI penalties, as we explain below. We also re-examine the application of the renewals basis to the cost of valuable items in unfurnished let properties, and supply words of warning for clients who are getting excited about accessing their pension savings.

Really Timely Intervention

In our newsletter on 11 September 2014 we said that RTI is a SNAFU mess, and so it continues. The fact that HMRC have introduced yet another penalty concession is evidence that the system still is not working as it should. 

Late filing penalties for RTI returns came into effect for employers with 50 or more employees from 6 October 2014, and are due to apply for all other employers from 6 March 2015. Those dates still apply but HMRC has said it will not issue a late filing penalty if the FPS is submitted within 3 days of the payment date (the date the employees are contractually due to be paid), or there is another valid reason for submitting a late FPS.  

If a late filing penalty notice has already been issued, for a period since 6 October 2014, the employer (or you or their behalf) can ask for the penalty to be removed. Do this by logging an appeal via the online appeals system. Complete the “other” reason box with the statement “return filed within 3 days”, the penalty should be cancelled.  

Late payment penalties were also due to apply automatically from 6 April 2015. However, HMRC is now going to hold-back on the automatic button and issue late filing penalties on a risk-assessed basis. We assume this means HMRC will only issue a late filing penalty when it is very clear that PAYE was deliberately paid late. This should avoid penalties being issued for the many disputed amounts showing up on employers’ business tax dashboards (online accounts) as underpaid or estimated PAYE.  

This is an
extract from our tax tips newsletter dated 19 February 2015. The newsletter
itself contained links to related source material for this story and the
other two topical, timely and commercial tax tips. It’s clearly written
and extremely good value for accountants in general practice. Try it
for free by registering here>>>