HMRC’s three-day penalty easement for late FPS submissions will continue for the 2017-18 tax year, it has been revealed.
The RTI three-day easement was introduced as a temporary measure for the tax year 2015-16. It means that HMRC will not impose their late filing penalty regime if the Full Payment Submission (FPS) is late but sent within three days of the payment date that is declared. The regime was supposed to be reviewed in 2016-17.
However, late in the 2015-16 tax year, HMRC issued a note to the Taxpayer Data Standards Forum (TDSF) which said:
“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 has 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.”
However, importantly they pointed to their ‘sending an FPS after payday guidance’ and said that the filing deadline (on or before the payment date declared on the FPS) remains unchanged.
On 7 September 2017, I happened to notice that HMRC has quietly updated their ‘What happens if you don’t report payroll information on time’ page which now reads:
HM Revenue and Customs (HMRC) won’t charge a penalty if:
You have to wonder whether this is because HMRC have yet to decide on an appropriate penalty regime or whether their systems are not capable of implementing one, regardless of what they choose. So, good news on the one hand but troublesome on the other.