RTI

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Do these come into force in October? How much are the penalties for a late return?

I process quite a few payrolls and work on my own..  At some point I am going to forget or be unable to file a weekly/monthly FPS. I a bit worried about being issued a penalty or penalties and having to pay then rather than it being the clients liability. How can I shift the burden of responsibility over to the client?

Replies (46)

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By mrme89
04th Sep 2014 12:21

If the client is paying you to do the payroll and you ‘forget’ or are ‘unable’ to file, that’s your problem, not the clients. You can’t expect a paying client to stump up for penalties because of your failings.

 

Have you thought about outsourcing the payroll?  

The penalty regime can be seen here

http://www.hmrc.gov.uk/payerti/reporting/late-reporting.htm#3 

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Euan's picture
By Euan MacLennan
04th Sep 2014 12:27

Read all about it

HERE.

You are allowed one late submission per client per tax year without being penalised, so improve your control systems to ensure that you don't "forget" and make sure that you don't make a habit of being "unable" to file.

You could avoid all responsibility by telling your clients to do their payrolls themselves.  However, when you process payrolls for clients, they are paying you for the peace of mind of knowing that you will ensure that their payrolls are run in total compliance with the law.  Do it right or pay the penalty.

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By pauld
04th Sep 2014 12:32

thanks for replies

I am only human and mistakes will be made. It just looks like a cash cow for HMRC. For what I charge for payroll I think outsourcing is looking like the preferred option. Any recommendations?

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RLI
By lionofludesch
04th Sep 2014 12:35

Diary

Use the diary function on your computer or phone.

It'll send you a message to remind you to submit.

And don't leave it til the last minute.

It's not rocket science - you'll no doubt come up with a reminder system that suits you.

 

Having said that, I still think HMRC have a cheek charging employers penalties for not doing unpaid tax admin for them.  What happened to William Wilberforce ?

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By NYB
04th Sep 2014 21:19

RTI Penalties
Glad you aren't doing my payroll I, too, run a payroll business. " on my own" & have got to grips with RTI over the past 18 months. It's all down to being that bit more disciplined & keeping up to date with HMRC bureaucracy.
There has been so much publicity on the penalties & returns expected. The max penalties for late submission is 11 per year per employer.
So weekly paid are not at a disadvantage over monthly. HMRC work on the "expected" FPS per month. So if you are late with a week it won't generate a penalty but it will generate a generic notice.
I'll stop there! Read and keep up to date.

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Replying to Tax Dragon:
RLI
By lionofludesch
05th Sep 2014 09:00

Yes they are

NYB wrote:
So weekly paid are not at a disadvantage over monthly.

Yes they are.  They have four or five deadlines to keep instead of just the one.

Don't believe the propaganda.

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Replying to ireallyshouldknowthisbut:
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By NYB
05th Sep 2014 10:57

RTI

Yes - four or five submission deadlines indeed but the penalty regime does not disadvantage the weekly paid. It may mean more work for you but surely you have been coping over the past 18 months or have you been receiving generic notices constantly. No employer weekly/monthly/fortnightly can receive in the course of one year more than 11 penalties.

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By pauld
05th Sep 2014 09:32

whats happens?

if being a one man band and you fall ill or go on holiday for two weeks and therefore unable to file the weekly return. I have one business where the wages change on a weekly basis. Am I to be penalised for taking a holiday?

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Replying to atleastisoundknowledgable...:
Stepurhan
By stepurhan
05th Sep 2014 11:04

Net pay question AGAIN

pauld wrote:
if being a one man band and you fall ill or go on holiday for two weeks and therefore unable to file the weekly return. I have one business where the wages change on a weekly basis. Am I to be penalised for taking a holiday?
So how do you cope with calculating the net pays in these circumstances? Clients need to know the net pays to pay their employees. If you have a planned absence, you can calculate in advance. If you are unexpectedly ill, you need someone to cover for you to get those net pays to the client. Either way, once you have calculated the net pays, submitting the report is simple.

As is so often the case in these threads, the penalties are a red herring. If you can provide the client with net pay figures, you can submit the RTI report. If you cannot provide the client with net pay figures when they need them to make payment then you cannot provide a proper payroll service. Asking the client to guess the amount to pay and then sorting it out later is not providing good service.

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Replying to jcace:
RLI
By lionofludesch
05th Sep 2014 11:26

Inventing Problems

stepurhan wrote:

pauld wrote:
if being a one man band and you fall ill or go on holiday for two weeks and therefore unable to file the weekly return. I have one business where the wages change on a weekly basis. Am I to be penalised for taking a holiday?
So how do you cope with calculating the net pays in these circumstances? Clients need to know the net pays to pay their employees. If you have a planned absence, you can calculate in advance. If you are unexpectedly ill, you need someone to cover for you to get those net pays to the client. Either way, once you have calculated the net pays, submitting the report is simple.

As is so often the case in these threads, the penalties are a red herring. If you can provide the client with net pay figures, you can submit the RTI report. If you cannot provide the client with net pay figures when they need them to make payment then you cannot provide a proper payroll service. Asking the client to guess the amount to pay and then sorting it out later is not providing good service.

This has never been an issue for me.

A much more common problem is some employer coming to me and telling me that an employee left three weeks ago.

Anyway, how often has it been said on here that RTI only requires cumulative figures so everything's self correcting ?  Just don't go on holiday at the beginning of April.

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By mrme89
05th Sep 2014 09:35

If you can't fulfill your obligations, you shouldn't take the work on.

I wouldn’t be impressed if I was your client … “sorry but you have a penalty because I decided to go on holiday. I think you should pay for this though, not me”.

 

If you replaced the words RTI for SATR, would you have asked the question?

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By JCresswellTax
05th Sep 2014 09:39

You are a one man band

Therefore you need to have systems in place to cope with you taking a holiday.

You really do have the wrong attitude regarding this i'm sorry to say.

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By pauld
05th Sep 2014 09:50

yes I know

we all need to have the  'correct systems in place bla bla bla.'. My point really is that it's a bit like some strategically placed speed cameras set up just as a revenue raising exercise. What happened to 'reducing the burden for smaller businesses?'

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Replying to Matrix:
By mrme89
05th Sep 2014 09:54

.

pauld wrote:

we all need to have the  'correct systems in place bla bla bla.'. My point really is that it's a bit like some strategically placed speed cameras set up just as a revenue raising exercise. What happened to 'reducing the burden for smaller businesses?'

 

But if you were told about where the speed camera was well in advance but you still decide to speed through it, nobody else can be blamed but you.

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By JCresswellTax
05th Sep 2014 09:55

You're a bit late to the party with that!

But yes, you are 100% completely correct in your thoughts.

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By pauld
05th Sep 2014 10:07

mrme89

I was referring to the man dressed in bright green around the corner jumping out from the hedge with his toy camera.  Can you tell me next time he's there?

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By mrme89
05th Sep 2014 10:19

Come off it

Whether the penalty regime is fair or not, we have known about it for ages.

 

You have had plenty of time to get your weekly payrolls to monthly or outsource your payroll function completely.

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By Liz D
05th Sep 2014 10:39

shifting the burden of responsibility over to the client?

Isn't this why the clients come to you to shift the burden away from them?  I work with several accountants on an ad-hoc basis.  Most are one man bands but they know if they get too busy or plan holidays I'll work with them so that the client doesn't suffer (with advance notice if its holidays).    I suggest you find a local qualified bookkeeper as back up. 

 

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RLI
By lionofludesch
05th Sep 2014 11:05

Take your point

I take your point but, if we return to the speed camera analogy, I'm pretty certain that passing four or five speed cameras is more risky than passing one - even if I was limited to no more than one fine.

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By refs8
05th Sep 2014 12:13

Human error happens, a while back due to a misunderstanding we failed to file the April 2013 cis return for 9 clients - cost to us could have been £900. Our fault and would have paid the penalties. As soon as we realised we spoke with HMRC and they said appeal on those grounds, all the appeals were accepted and we were "lucky".. They did say that they are looking to issue penalties only to those that are repeat offenders.

I think the moral is if in doubt appeal - you have nothing to lose, and if the appeal fails try a compliant or just "beg"

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By pauld
05th Sep 2014 12:31

Reciprocal arrangemnets

I think that when HMRC make their first error on a client, they should  be issued with a warning notice advising them of their first error and all future errors will incur a penalty. They will of course have a right of appeal to an independent body if they have a reasonable excuse. Reasonable excuse would not include the following;

Our computer automatically issued the penalty;

Mr H M Revenue did not make any notes on the system after your telephone call;

The Debt Management Unit use a different computer system to self assessment.

We telephoned your client but they did not pass the security questions and so we were unable to speak to them;

We did not know the company was dissolved 5 years ago;

 

 

 

 

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By refs8
05th Sep 2014 12:44

ICPA

Pauld ICPA have been discussing this recently....................

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By pauld
05th Sep 2014 12:53

ICPA

And..................................

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Replying to Montrose:
By JCresswellTax
05th Sep 2014 13:01

Unbelievable

pauld wrote:

And..................................

Look it up yourself, it's not difficult!

Common theme developing here...

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Replying to johnhemming:
By mrme89
05th Sep 2014 13:48

Agreed

JCresswellTax wrote:

pauld wrote:

And..................................

Look it up yourself, it's not difficult!

Common theme developing here...

 

Would love to see the figures for his client retention.

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By rjoconnor81
05th Sep 2014 13:08

Similar issue which we solved

We had a similar issue with one client (and one client only).  We close for 1 - 2 weeks over Christmas and for all of our payrolls, except one we run in advance and file the RTI then.   There is one client that has a payroll were hours change on a weekly basis, and still does over Christmas.  Before RTI this client would pay his staff an estimated amount each week (most don't pay tax or nic so calculating the net pay was not an issue) and then we would run the payroll on our return.  This obviously couldn't be known last year and going forward.  

We explained to the client (well in advance, in May before the Christmas), that we close over Christmas and that he is the only payroll that needs running this way and proposed that we ran two weeks payrolls in advance based on estimated hours (he does a rota in advance so this was sort of easy to do subject to changes).  This meant that he had the payslips and the RTI were filed well before christmas.  We then accounted for the differences in the first week back.  He was happy with this and it worked well.  Maybe explain to your clients well in advance when your holidays are and try to get the same thing in place.  

 

With regards to shifting the burden, can't see how you can.  If it is your fault there are penalties then you need to pay up (or appeal with no cost to the client).  If it is clearly the client's fault (not providing hours in time) then it is their responsibility.  We clearly outlined this to them in the new engagement letters including RTI and have reiterated in e-mails and newsletters.  They can't say they were not warned.  

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By thomas34
05th Sep 2014 15:56

Weekly Payrolls

Any sole practitioner who prepares weekly payrolls is either (a) insane, (b) desperate for work or (c) far braver than I (or a combination of those).

My advice to the OP is to ditch any weekly payrolls unless he has someone to whom he can delegate in the event of a planned absence or more importantly an unforeseen absence. Yes, we get one free misdemeanour per year but a computer breakdown could easily use that up.

For practitioners like myself I do believe that we are entering uncharted territory. For years we've been aware of the sanctity of 19 May (or was it really 26 May?) and of Companies House, self-assessment and corporation tax deadlines. Apart from P35s most deadlines were dealt with individually. We now have the opportunity to rack up serious penalties dependent upon the number of payrolls we prepare.

 

 

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Replying to bernard michael:
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By NYB
06th Sep 2014 09:28

Weekly Payroll
I am of the insane variety unfortunately. No matter how hard I pressured 18 months ago I could not get certain clients to go monthly. Suppose that's the type of client I have but someone has to do their payroll. Mainly the small restaurant brigade who pay cash with staff who need weekly pay. Luckily I have back up from a lady who uses the same payroll package as me. Yes it's a pain up the [***]. Every holiday I have to " plan". I tend to go mid month to make it easiest.

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By Briar
05th Sep 2014 16:03

New Rules from October

Nobody has mentioned the relaxation of the penalty rules for small employers from October 2014. These were published on 14/08/14 and are on Ros Martin's latest (free part) newswire (Thanks Ros!).

HMRC have finally seen sense.

 

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Replying to Helpful Harry:
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By NatSav
09th Sep 2014 14:16

Link

Please could you provide a link to this article? Couldn't find it on a Google search.

Thanks.

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Replying to Helpful Harry:
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By NatSav
09th Sep 2014 14:19

Link

Briar wrote:

Nobody has mentioned the relaxation of the penalty rules for small employers from October 2014. These were published on 14/08/14 and are on Ros Martin's latest (free part) newswire (Thanks Ros!).

HMRC have finally seen sense.

 

 

Please could you provide a link to this article? Couldn't find it on a Google search.

Thanks.

 

P.S. Sorry about my last post. I haven't quoted on here before so I was just figuring out how to do it.

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By Healthpay
06th Sep 2014 10:49

Computer breakdown?
Computer breakdown should not disrupt your business. If it does then you have an inadequate resilience strategy. I speak as a one-man band with at least four levels of data redundancy. And holidays are no problem - I take an hour out with a laptop from time to time. Christmas? What's that?

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RLI
By lionofludesch
06th Sep 2014 21:53

Resilience Strategy ?????

Or management gobbledygook.

Speaking in plain interest will help your Client Retention Capability.

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By Healthpay
06th Sep 2014 22:26

Great idea!

When somebody talks common sense that we don't like let's just ridicule what they are saying. That should work!

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By David Lockett
08th Sep 2014 14:59

Direct from the Oracle

I had an interesting conversation with HMRC about this (if that isn't an oxymoron) and the comment that was made was that each RTI submission doesn't necessarily have to be correct but it does have to be on time.

So you could file an estimated RTI return to ensure you do not miss any deadlines and then correct the figures next time you file since it is the cumulative figures that HMRC seem to be interested in, thus making the self correctly property of the system work in your favour.

We file a fixed salary for a number of directors each month and to reduce our exposure on these at holiday times, we simply file a month ahead of ourselves E.g. File July RTI in June.  If anything changes, we can then correct the appropriate month figures prior to the next filing.

We do however only have very small payrolls to deal with since we either outsource the larger ones or the client outsources it themselves.  However, the way we share the responsibility for the ones that we do is by the use of deadlines.  If the client gets the information to us by a deadline, we guarantee to file on time.  If they are late and we do not have time to process the payroll and file it on time then the fine will be the responsibility of the client.  

Other than that we have a good working relationship with our clients and if we are going on holiday and this may affect them, we discuss it with them and reach an amicable solution.  It's good to talk.

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By admin.trssecretaries.co.u
08th Sep 2014 17:27

remote connectivity

Weekly payrolls for pubs etc prepared and RTIs filed remotely. Takes less than an hour provided done out of UK office hours so no one else attempting to access system simultaneously

This week's payrolls done & RTIs filed - cheers from sunny Provence!

 

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Replying to jaxx789:
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By David Lockett
08th Sep 2014 17:41

Tres Bon

Now that is what I call good thinking!

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By admin.trssecretaries.co.u
08th Sep 2014 18:15

Merci bien!

Sans paroles...

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By MSD1968
08th Sep 2014 18:38

The dreaded cloud
Use cloud-based software which allows your clients to log into their own payroll via a secure portal to print payslips (or email password protected PDFs) and all will be well. Just check that an internet connection of some kind - WiFi, 3G, 4G - will be available wherever you happen to be on holiday. Use an Internet cafe if you have to with client records accessible in the cloud. Earning fees for minimal effort while on holiday - joy (G&T optional). That should take care of the 'unable' part. The 'forget' part needs no further comment from me.

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By dnicholson
08th Sep 2014 23:10

Internet cafe
I'd avoid the Internet café for this kind of thing.

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Replying to Struel2909:
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By MSD1968
08th Sep 2014 23:24

I agree far from ideal

dnicholson wrote:
I'd avoid the Internet café for this kind of thing.

but possible if you are sensible and careful, clear the cache, wipe history etc.

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Replying to WhichTyler:
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By dnicholson
08th Sep 2014 23:31

Key logging

MSD1968 wrote:
dnicholson wrote:
I'd avoid the Internet café for this kind of thing.
but possible if you are sensible and careful, clear the cache, wipe history etc.

 

I think keyloggers would be your main danger. Once established the connection will be safe, but the password that you type to get there may be captured locally.

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By arcon5
09th Sep 2014 06:00

Op
if your gonna outsource then let's hope the company you use haven't found a way of making you liable for their negligence

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By fd_FD_coop
09th Sep 2014 12:01

Weekly Payroll & RTI

I run a small payroll bureau. I have a weekly client (retail) and it is this client that causes me the most stress in terms of managing RTI. For vacations, I put the software on wuala drive and work remotely from my surfacepro.  The client sends me the data on Monday and pays them on Wednesday. They have 10+ staff so they are just over the threshold to avoid penalties. So it is of course my responsibility to ensure that everything is filed on time. Hence the stress. I now have reminders on my phone for Monday and Wednesday. 

A few years back I missed the P35 filing due to human error (thought it had been done) of course I did not find out for four months so I had to take the full hit. Being a one man band this was horrendous but it was my fault so I had to take it on the chin. It does focus the mind though!

If in doubt I file the RTIs, as other posters have said you can always correct it later.

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By fd_FD_coop
09th Sep 2014 14:45

Is this what you mean?
Temporary relaxation of reporting arrangements for micro employers (nine or fewer employees)

HMRC has announced that existing employers with nine or fewer employees, who need more time to adapt, can report PAYE information on or before the last payday in the month until April 2016. This means that micro employers who are still finding it difficult to report PAYE information on or before the date they pay their employees will have more time to adapt their arrangements so that their business is ready for full real time reporting from April 2016.

This change is narrower than the relaxation which ended on 5 April 2014, this new relaxation will only apply to existing employers with nine or fewer employees. All new employers, as well as existing employers with 10 or more employees, must report PAYE information in real time. Follow the link below to read about the relaxation which runs until 5 April 2016.

This support for existing micro employers means micro businesses and their agents have up to a further two years to change their processes and their arrangements to enable them to adapt to reporting in real time. HMRC recommends employers change their processes as soon as they can to ensure they are ready, in time for April 2016, when all employers must report PAYE information each time they pay their employees.

Download 'PAYE: A relaxation to the reporting arrangements for micro employers (9 or fewer employees)' (PDF 40K)

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By paddy55
12th Sep 2014 07:59

Penalties

Shift the liability to the client by contract unless statute expressly negatives such action.

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