Respite for small employers as HMRC delays introduction of RTI late-filing penalties

HM Revenue & Customs (HMRC) have announced today that they will exempt small employers with 49 or fewer staff from being issued with automated PAYE real-time information (RTI) late filing penalties until March 2015. The Chartered Institute of Taxation (CIOT) has hailed the announcement as a positive step in helping small business transition into the new PAYE reporting method, but says wrinkles remain in the overall system.

HMRC will issue penalties to employers with 50 or more staff who file their PAYE returns late from the 6th October of this year, and from 6th March 2015 for the remainder of employers.

Commenting on the announcement, Colin Ben-Nathan, Chairman of the CIOT Employment Taxes sub-committee, said:

“The Institute welcomes this delay until March 2015 as regards the issuing of automated PAYE RTI late filing penalties for small employers. Smaller employers, in particular, need a longer period of time to adjust to PAYE and other administrative changes because they have very limited resources which are primary geared to servicing their clients and customers.  So it is encouraging to see that the Government have recognised this point in the present circumstances.1

“However, we think that HMRC still has work to do in ensuring the accuracy of automated generic notification messages to employers. An improvement in the accuracy of the late filing, non-filing and late payment messages would not only reduce the volume of penalties issued in error by HMRC, but would also reduce the number of appeals that inevitably result from this.

“Additionally, we consider that HMRC needs to do more to make speedier use of the RTI data it is receiving to improve the accuracy of PAYE deductions for employees and pensioners.”



Notes to editors:


1.       In March 2013 HMRC announced that they were making a significant relaxation to the Real Time Information (RTI) PAYE reporting requirements for small employers for a limited period. They announced in June 2013 that they were extending this. In December 2013 they announced the relaxation would continue for micro-employers (those with one to nine employees).


2.       Further details on HMRC’s announcement today available at:


3.       The Chartered Institute of Taxation

The Chartered Institute of Taxation (CIOT) is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. Through our Low Incomes Tax Reform Group (LITRG), the CIOT has a particular focus on improving the tax system, including tax credits and benefits, for the unrepresented taxpayer.

The CIOT draws on our members’ experience in private practice, commerce and industry, government and academia to improve tax administration and propose and explain how tax policy objectives can most effectively be achieved. We also link to, and draw on, similar leading professional tax bodies in other countries.  The CIOT’s comments and recommendations on tax issues are made in line with our charitable objectives: we are politically neutral in our work.

The CIOT’s 17,000 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.

George Crozier
Head of External Relations

+44 (0)20 7340 0569
+44 (0)7740 477374