2013/14 failure to submit end of year submission

2013/14 failure to submit end of year submission

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I have a client for whom the month 12 RTI submission for 2013/14 was omitted - there had been no salary payments through the whole year and the system did not allow the RTI to e filed until after the end of the payroll month if there were nil salaries.  (No salaries have been paid for the current year either).  Unfortunately, no-one went back to file it after the month end.

However, the first notification of non-submission received for this client is a final determination for £400 penalties (£100 per month);

Is there a basis for appeal for some/all of the penalty? 

Since there was not a requirement for P35 for that year under RTI, surely this is merely the non-submission of a normal RTI month, for which we've been told there should not be penalties until next year?

Replies (13)

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By johngroganjga
24th Oct 2014 15:05

Appeal all of it on the basis that there was no year end return to make.

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By onicholson
24th Oct 2014 15:20

Year end

If a PAYE scheme was open, it was required to send a year end submission with a few declarations. Failure to send that by 19th May lead to a penalty in the same way that not filing a P35 or sending the nil submission did before RTI. The fact that nobody was paid is irrelevant to the year end requirement.

The penalties for missing each month in-year are separate and didn't exist last year. There were specified charges last year, which are estimates of liabilities, but they aren't penalties (mostly) and function very differently.

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By johngroganjga
24th Oct 2014 15:29

Yes but P35's were never required where no wages had been paid.  So what you describe is not "in the same way" as it used to be previously.  It is different from how it used to be. 

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By onicholson
24th Oct 2014 16:03

Nil return

You had to complete the nil return indicating that you had no P35 to file, which was largely just a checkbox on the site by the end. Technically it's different, the same as it's different for companies with wages - RTI has no P35 - but you still had and have to do something at year end for HMRC as long as you have the PAYE scheme open.

It's another good argument to close the PAYE schemes that are left open 'just in case' for a long time. You may even find that HMRC will close it for you if you don't do anything with it for a while.

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By johngroganjga
24th Oct 2014 16:15

Yes you had to confirm you had no P35 to file.  That's not the same as having to file one.

HMRC have not helped by withdrawing the facility to notify by ticking boxes on their website.

They will say that people can do it by RTI now can't they?  But not if they have no employees and pay no wages they can't.  The schemes that are caught by this are not necessarily the ones that are left open "just in case" and should be closed.  They include the ones that are open just so a P11D can be submitted and can't close for that reason. 

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By onicholson
24th Oct 2014 16:24

EPS

You can file the year end through an EPS, which doesn't require any employees. The only information you need are the declarations (P11D, free of tax, etc.). Yes, the site would've been more convenient that downloading the basic tools, but it's not exactly a big job.

I'm not sure what grounds you'd have for appeal beyond not knowing it was necessary, which isn't looked on too kindly.

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By MzEden
24th Oct 2014 16:53

We had these and appealed the amount due on the grounds that, with RTI, HMRC would have known on 20th May that the return (or equivalent) hadn't been submitted and should not have waited until October to tell us.

We sent a cheque for £100 admitting that the return was late.

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By johngroganjga
24th Oct 2014 17:03

A company with no employees and paying no wages would quite reasonably take no notice of anything to do with RTI as it would obviously not apply to it - just as rules about filing VAT returns would quite reasonably be ignored by companies not registered for VAT that had no VAT returns to file.

So such a company would not have been able to file an EPS on or before 19 May 2014 because it would, obviously have no payroll system of any kind , RTI compatible or not.  

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Replying to mrme89:
Euan's picture
By Euan MacLennan
24th Oct 2014 18:21

Inconsistent

johngroganjga wrote:

A company with no employees and paying no wages would quite reasonably take no notice of anything to do with RTI as it would obviously not apply to it - just as rules about filing VAT returns would quite reasonably be ignored by companies not registered for VAT that had no VAT returns to file.

A company not registered for PAYE can safely ignore RTI, just as a company not registered for VAT can safely ignore filing VAT returns.  The point here is that the company had registered for PAYE and regardless of whether it had paid any wages or not, it cannot ignore RTI.

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By johngroganjga
24th Oct 2014 19:48

But it never had anything to report under PAYE, so it was reasonable for it to assume that it would have nothing to report under RTI, whose name suggests that it is just a system for reporting in real time what was previously reported in arrears after the end of the year. A company which had never had anything to report after the end of the year could be forgiven for believing that reporting the same information (i.e. zilch) in real time would not be something it would have to take any action to do.

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By dnicholson
25th Oct 2014 00:35

Nothing to file = something to report
But since the scheme exists, it has to report that there's nothing to report. Only if the scheme didn't exist would there be nothing to do.

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By LJCASE
25th Oct 2014 18:49

HMRC says EPS should have been submitted...

... I phoned HMRC and sent an appeal letter - HMRC said that as there is a scheme open a EPS was required. Full stop.

The nice lady on the other end of the phone said that there had been a lot of appeals such that the result will be received the day before Christmas.

My (new) client didnt understand that when you pay CIS and suffer CIS you are supposed to submit a EPS - he thought the issue of PAYE payslips etc was an error. He rang HMRC and they said it was an error and would stop the scheme.

They obviously thought better of it and didnt. Nothing was heard until the £400 penalty was received.

Mceden suggests appealing and sending £100. Anyone have thoughts on this? I dont want to wait until Christmas only to find that the penalty was correct after all. Will the rejection of an appeal in December mean further penalties?

 

 

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By Attfield
26th Oct 2014 20:12

If you read the letter......

If you read the letter notifying the company of the penalty, it says - 'Penalties are £100 for each month for every 50 employees'. Therefore, if the company doesn't have any paid employees then there can't be a financial penalty. I have successfully appealed on this basis a couple of times. You should still file an EPS for that year though, as HMRC don't seem to be able to close that year off without one..

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