Almost all employers are now reporting their PAYE information in real time. Following the introduction of RTI in April 2013, it was decided to stagger the start of the in-year late filing and payment penalties to give employers more time to adapt to reporting in real time.

The late filing penalty regime started on 6 October 2014 for employers with more than 50 employees. There was an exemption for small employers until 5 March 2015. HMRC has now issued the first in-year penalties notices to employers with fewer than 50 employees who missed the filing deadline. However, in line with a new approach to penalties, HMRC has said that they will apply a proportionate approach and concentrate on the more serious defaults on a risk-assessed basis.

This approach will enable HMRC to concentrate more resources on the more serious failures to comply, and to focus on educating employers about their filing obligations through targeted communications, webinars and Employer Bulletin articles.

HMRC has also said that it will not be penalising minor delays of up to three days. Any employer who receives a late filing penalty notice for tax year 2014 to 2015 quarter 4, but who filed within three days of the reporting deadline, may appeal electronically using the Penalties and Appeals System (PAS) on HMRC Online. Employers should select reason code A for disputing a penalty.