Tag: tax year

What happens if you do not report payroll information on time

D55F3A85-4C8C-4000-8482-9D1DEE8C5C44When penalties are charged

You can get a penalty if:

HMRC will not charge a penalty if:

  • your FPS is late but all reported payments on the FPS are within 3 days of your employees’ payday, however employers who regularly file after the payment date but within 3 days may be contacted or considered for a penalty
  • you’re a new employer and you sent your first FPS within 30 days of paying an employee
  • it’s your first failure in the tax year to send a report on time (this does not apply to employers who register with HMRC as an annual scheme)

How much you pay

What you pay depends on how many employees you have.

Number of employees Monthly penalty
1 to 9 £100
10 to 49 £200
50 to 249 £300
250 or more £400

If you run more than one PAYE scheme, you can be charged penalties for each.

How we estimate what you owe

HMRC may raise a specified charge based on an estimate of how much we think you should pay if you do not:

  • submit your FPS on time
  • tell HMRC, by sending an EPS, that you have not paid any employees

This is based on your previous PAYE payment and filing history. You’ll be able to see any specified charge by looking at your PAYE account online.

A specified charge does not replace the need for you to send your FPS or EPS. Only submitting the missing FPS or EPS for each month will:

  • replace the charges with the amount that is due for each month
  • support an appeal you make against a late filing penalty

If you send updated year-to-date figures in your next FPS instead, the specified charges will remain in place. However, your accounting record will be adjusted to reflect the year-to-date figures given in the later month.

If you get a penalty

HMRC sends penalty notices every quarter. A notice will include:

If you pay the penalty within 30 days of getting the notice you will not be charged interest.

You can appeal if you think:

  • the penalty is not due
  • the amount of the penalty is wrong
  • you had a reasonable excuse for sending your reports late

Reasons you can give for grounds of appeal are:

  • data on the returns was incorrect
  • death or bereavement
  • filing expectation incorrect
  • filed on time
  • fire, flood or natural disaster
  • ill health
  • IT difficulty
  • missed correction or easement
  • no longer have any employees
  • no payments to employees
  • theft or crime
  • other – only use this option if your reason for appeal does not fall into any of the categories in the online system

More information can be found here

Payroll Annual Reporting

Payroll 21If you are an employer running payroll, you need to:

  • report to HM Revenue and Customs (HMRC) on the previous tax year (which ends on 5 April) and give your employees a P60
  • prepare for the new tax year, which starts on 6 April

Update employee payroll records

For each employee working for you on 6 April, you’ll need to:

  • prepare a payroll record
  • identify the correct tax code to use in the new tax year (The most common tax code for tax year 2021 to 2022 is 1257L.  You can find out more about tax codes here)
  • enter their tax code in your payroll software

You should include in your payroll:

  • all employees you pay in the tax year, no matter how much you pay them
  • any employee who has worked for you in the current tax year (since 6 April) even if they have already left

Qualifying Earnings Pension Schemes

Image result for pensions schemesEvery year, the Department for Work and Pensions (DWP) reviews the earnings thresholds for automatic enrolment pensions. The changes take effect from the start of the next tax year following the changes on 6 April

If you’re using qualifying earnings, you’ll contribute a percentage of your worker’s gross annual earnings that fall between £6,136 and £50,000. The first £6,136 of their earnings isn’t included in the calculation. For example, if a worker earns £20,000 their qualifying earnings would be £13,864.  This means that qualifying earnings can’t be more than £43,864 (£50,000 minus £6,136) for the 2019/20 tax year

Earnings thresholds for 2019-20

Pay reference period
2019 – 2020 Annual 1 week Fortnight 4 weeks  1 month  1 quarter Bi-annual 
Lower level of qualifying earnings £6,136  £118  £236  £472  £512  £1,534  £3,068
Earnings trigger for automatic enrolment £10,000  £192  £384  £768  £833  £2,499  £4,998
Upper level of qualifying earnings £50,000  £962  £1,924  £3,847  £4,167  £12,500  £25,000

More information can be found here