HM Revenue and Customs (HMRC) has published a consultation document, which aims to make pay-as-you-earn (PAYE) reporting in real time as easy as possible for employers.
The consultation document, Securing compliance with real-time information: late filing and late payment penalties, seeks views on how best to support employers to understand and comply with the requirement, which comes into effect for all employers by October 2012.
The real-time information (RTI) legislation means employers and providers must send information to HMRC about employees’ pay, tax and national insurance deductions in real time, rather than just at the end of the year.
Stephen Banyard, acting director general for personal tax at HMRC, said: “We want the RTI returns, not penalties. The aim is to encourage all employers to comply by making it as easy as possible for them to do so.
“We are working with employers and the payroll industry in our 12-month pilot to best achieve it, but penalties are necessary to deter the minority who don’t want to play by the rules and to reassure those that do file and pay on time that non-compliance is being tackled.”
Steve Wade, director and leader of the RTI project at KPMG, added : “We agree with HMRC that penalties will be necessary to deter the minority of employers that might not play by the rules.
“But perhaps, before looking at how to punish people for getting it wrong, it would make sense to iron out some of the many remaining issues around getting it right. As the RTI proposals currently stand, some employers will find it extraordinarily difficult to comply with the requirements through no fault of their own.
“The penalty regime needs to have some flexibility to accommodate these employers that may well be genuinely trying their very hardest to fulfil their obligations, but unable to because the rules are either not clear or not practical.”
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