At the end of last week, HMRC made the following announcement:

‘Following a review of the three day easement and risk-assessed approach adopted last tax year which has seen a significant reduction in returns filed late, HMRC have decided to continue this approach for a further tax year. As a result employers will not incur penalties for delays of up to three days in filing PAYE information during the 2016-17 tax year.

Late filing penalties will continue to be reviewed on a risk-assessed basis rather than be issued automatically. 

The three day easement is not an extension to the statutory filing date which remains unchanged. Employers are required to file on or before each payment date unless the circumstances set out in the ‘sending an FPS after payday guidance are met. HMRC won’t charge a late filing penalty for delays of up to three days after the statutory filing date, however employers who persistently file after the statutory filing date but within three days, will be monitored and may be contacted or considered for a penalty. 

HMRC will continue to review their approach to PAYE late filing penalties beyond 5 April 2017 in line with the wider review of penalties and will continue to focus on penalising those who deliberately and persistently fail to meet statutory deadlines, rather than those who make occasional and genuine errors for which other responses might be more appropriate.’

The good news

The wording of the text confirms a continuation of the penalty easement that applied in 2015/16. HMRC will not start a late filing regime under their ‘Schedule 24’ powers in the circumstances that the FPS is late but sent within 3 days of the payment date that is declared – as long as the employer is not a persistent offender, whatever the definition of persistent is.

Further, it seems to be in line with their consultation Responses document on 17 September 2015 that indicated HMRC wished to further consult on late filing penalties and would legislate as part of Finance Bill 2017.

The concerning bit

Where did this text come from was the question that I asked myself when I read it. As it turned out, it was text released to certain employer representatives on the Taxpayer Data Standards Forum (TDSF).

I am a great believer in effective communication. It is not effective to release one lot of information to one group of people and release it in another format to the rest of us, as this is how the same announcement sneaked out on Gov.UK on 23 May 2016:

‘HMRC won’t charge a penalty if: 

  • your FPS is late but all reported payments on the FPS are within 3 days of your employees’ payday (this applies from 6 March 2015 to 5 April 2017) however employers who persistently file after the payment date but within 3 days may be contacted or considered for a penalty’Why say on or before payment date to the select group and on or before payday to the rest of us? Has there been an official announcement of this – not that I can see.———————

    I hope that this post has given you the full story about the continuing penalty easement. Most importantly, the easement continues into 2016/17, albeit that we get the announcement over 6 weeks into the new tax year!

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