Reasons for historic PAYE submission?

Reasons for historic PAYE submission?

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I recently took on a payroll client who is working Mum who is trying to do the right things by her child minder and HMRC by reporting her child minders earnings ie not using a cash in hand arrangement.  Her child minder works 15 hours per week, i.e. is a low earner and will pay not NIC or tax this year.

I need to submit 2 historic PAYE submissions to get her payroll in order and I will need to enter a reason why the submissions are late.  This reason is effectively the appeal to HMRC to avoid any penalties.   

Has any one successfully submitted historic PAYE runs and avoided the penalties by providing a reason?  If yes, all advice on approach or reasons used would be appreciated. 

I have spoken to HMRC who advised that they are unable to provide advice, as the penalty regime so new they have not defined what is deemed an reasonable excuse or not at this time. 

And yes - whilst in theory my client should be penalised for being late, HMRC is owed no money.  It would be ridiculous if they penalised her  - they should have bigger fish in the sea to worry about!

Thank you.

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Euan's picture
By Euan MacLennan
17th Nov 2015 13:36

Some facts would be helpful
How historic?  What are the 2 periods conecened?If no NIC or tax is due, the childminder is presumably paid less than the NIC primary threshold and has no other job, but is she paid less than the NI LEL?From what date did the Mum register for a PAYE scheme?Was the childminder being paid before that date?

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By tbennett
17th Nov 2015 14:47

Sure.

1. Outstanding PAYE submissions due for Sep and Oct 15 only.

2. Child minder makes £135 per week, so above LEL and below PT.

3. Mum registered as an employer on 9th Sep 15.  The child minder commenced her employment on 23rd Sep 15.

4. Child minder YTD earnings from 5 April 2015 to mid Sep 15 was £1,860

Thanks. 

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Euan's picture
By Euan MacLennan
17th Nov 2015 18:07

OK

If you are only intending to make 2 monthly submissions, I assume that the childminder is paid monthly - as the easement for micro employers to only file once a month even if staff are paid weekly does not apply to new PAYE registrations.

You get 30 days from registration to file your first FPS, but you are obviously beyond that deadline.

Apart from that, everyone gets the first month of late submission in a tax year without penalty, so that would cover Month 6 if the childminder was first paid before 6th October.  The client would therefore only be potentially subject to a late filing penalty for Month 7.

Although I doubt that a penalty would be imposed for a late FPS in these circumstances, you might like to file a nil EPS for Month 6 saying that no employees were paid (still technically subject to penalty, but even more unlikely for one to be charged) and then file a proper FPS for her pay in the 5 weeks to the end of October (hoping to get the benefit of the first late submission FOC).

Incidentally, if the childminder is paid weekly, you could file lots of weekly FPSs late, but you would only be penalised for one month in which a late submission is made.

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