Filing penalties began on 6 October for employers with schemes of 50 or more employees.
Employers who have incurred these penalties will start to receive the quarterly penalty notices from the beginning of February 2015. Agents will not be sent a copy of the penalty notice. However, the notice will contain a prominent message instructing employers who have an agent acting for them to show them the notice immediately, The notice will be in the form of a paper letter, and will set out all filing penalties incurred for quarter 3 of 2014-15 (ie for tax months 7, 8 and 9 covering the period
6 October to 5 January 2015). The penalty notice could contain more than one penalty.
Each penalty on the notice will have a Unique Identification (Unique ID) to help employers identify the penalty should they want to appeal. The penalty notice will explain what action the employer may need to take if they disagree and wish to appeal.
We want employers to understand and comply with their reporting responsibilities rather than incur penalties.
We use our electronic message service (sometimes called ‘generic notification service’ or ‘GNS messages’) to immediately advise employers when they may be in a penalty position. These messages aren’t penalty notices, they are a prompt to help employers understand their current PAYE position and bring it up to date if necessary. It’s important therefore to check these messages on a regular basis.
To prevent incurring penalties unnecessarily employers should:
- Report PAYE on time by sending a Full Payment Submission (FPS) on or before the earliest payment date that is reported on it.
- Make sure that, if they do need to report any payments late on an FPS, they tell us why using the late reporting reason codes: see the ‘Late reporting reason’ section of the What payroll information to report to HMRC guidance.
- Send an Employer Payment Summary (EPS) if they don’t pay anyone during the tax month. Employers can also use an EPS to tell us if there is going to be a period of inactivity and they won’t be reporting for several months.
- Make sure, if they use a payroll services provider or an agent to run their payroll, that they receive payroll information in good time to meet the reporting deadlines.
- Tell us if they have changed the number of payrolls or how often they pay their employees, for example changing from weekly to monthly – for details, see the Running payroll: changing paydays guidance.
- Tell us straight away if their PAYE scheme has now ceased and they are no longer paying anyone, using a final FPS or EPS – see the Stop being an employer guidance for details of what to do.
- Send an FPS or EPS in advance if they know they will be unavailable (for example, on holiday) when it is time to make a report.
Appealing against a penalty online using the Penalty and Appeals Service (PAS)
Employers and their authorised representatives can use HMRC’s Online Services to make an electronic appeal against filing penalties. PAS will display the penalty and allow employers or their agents to appeal online.
Using PAS and appealing online is the quickest way to make an appeal and have HMRC process it, and it means that employers or agents will get an immediate online acknowledgement. We therefore recommend employers and agents sign up for email reminders and notifications using options in PAYE Online if they haven’t already.
To make an online appeal, employers or agents should:
- Go into the PAYE Online section of Online Services
- Select ‘Appeal a Penalty’. Agents will find their clients’ details under “your current
‘Appeal a Penalty’ will list all the penalties that can be appealed, showing the:
– Unique ID
– Type of penalty
– issue date as shown on the penalty notice
– tax period end date
– amount of penalty.
It will also tell you if there are no penalties that can be appealed, by stating either ‘You do not currently have any penalties that can be appealed’ or, if you are an agent ‘Your client does not currently have any penalties that can be appealed’.
- Select the Unique ID as shown on the penalty notice for the penalty you wish to appeal against.
Select the reason for appeal from the drop-down menu list. You may also be required to provide additional information, for example ill-health or IT difficulties.
- For an appeal to be successful:
– We must have raised the penalty on an incorrect understanding of the facts (e.g. the submission was made on time or the size of the employer is wrong);
– there must be reasonable grounds for late submission.
– tell you that you’ve lodged your appeal successfully
– provide you with an acknowledgement reference
– tell you to check your GNS messages, to check the status of your appeal.
Please note that there isn’t a print function in the online appeal facility, so you may want to make an electronic copy of this screen for your records.
- We will then consider your appeal and issue one of two GNS messages immediately:
– ‘HMRC has received the appeal which has been accepted and settled, the penalty has been cancelled and a revised penalty notice will be issued in due course’. This notice will cancel the penalty and reduce the charge to nil.
– ‘The appeal has been received and referred for further consideration’. Appeals can also be made in writing and should contain the following information, which can be found on the penalty notice:
- PAYE Employer reference
- Unique ID of the penalty
- Default period
- Reason for appeal
Please remember that appeals can only be made online or in writing. They will be considered in exactly the same way, whichever method of appeal you use. Appeals cannot be made by telephone.