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Where Taxpayers and Advisers Meet

TW Ed IS Losing Sleep over HMRC and Tax

Better late than never, (Mark will be pleased), something positive to say about HMRC this week.  Strictly, two things, albeit closely related. Firstly, we have the fact that HMRC is postponing RTI filing penalties for another few months until 6 March 2015 for ‘smaller’ employers. Of course I am not referring to the physical size of the employer but the number of employees engaged: fewer than 50. Those employers with 50 or more employees are set to fall into the penalty regime from 5 October – just a few weeks away.

This is a good thing for many small employers who are still struggling to get to grips with the new reporting regime. If we assume that HMRC means what it says about penalties – that they are there to encourage compliance, rather than to raise money – this must surely be reflected in a penalty regime which is invoked relatively rarely, or that is ‘light touch’ and doesn’t bite too deep.  To my eyes, the RTI penalty regime is neither ‘light touch’ nor a nibble between meals. If too many small employers have not got to grips with RTI by the time the new penalty regime comes around, it will make the furore around the old CIS penalty regime look like a picnic. (Which is not to say that the new regime is much better).

The problem for HMRC is that RTI is supposed to ‘feed’ Universal Credit. That regime has its own problems but the theory is supposed to be that employees’ entitlements are calculated in ...real time, and of course employers have to provide that information first.

My second ‘good’ point is perhaps a little more selfish: have agents noticed that, this year, HMRC has been far more forthcoming about clients’ pay and tax details than for the last several years? I don’t think this is a coincidence but a ‘fringe benefit’ for agents, under the new order. If I have understood HMRC officers correctly, they are able to see up to date pay and tax information almost immediately, so 2013/14 pay and tax details are a walk in the park. This is most welcome. Of course P60-type information is not dependent on RTI but I am prepared to give HMRC two gold stars this week.

But then, I am about to take away about half a dozen. (You didn’t really think I’d gone soft, did you?)...

For the full article, see TW Ed IS Losing Sleep over HMRC and Tax