RTI penalty for a late EPS?

RTI penalty for a late EPS?

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HMRC website has this to say about when penalties are charged:

When penalties are charged
You can get a penalty if:

your Full Payment Submission (FPS) was late
you didn’t send the expected number of FPSs
you didn’t send an Employer Payment Summary (EPS) when you didn’t pay any employees in a tax month

Nothing about late EPSs

Now each month after I have filed all my FPSs, there are a few EPSs that are not due until the 6th of the next month, and I understand that these have to be filed by the 19th, so that HMRC can relate them to the correct month. So is the case that that the filing window for these is only 2 weeks, and if these are only filed at the end of the month along with next month's FPSs, will a penalty be charged?  I ask this because as a one man practice, one has to take holidays which avoids filing points.  I thought these were only at the month end but now I am questioning that.

Replies (8)

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Euan's picture
By Euan MacLennan
02nd Feb 2015 16:11

What sort of EPS?

I believe that the EPS specification now includes the pay period end date in the header, which means that the EPS should be allocated to the correct period whenever you submit it.

We always file EPS reports for recovery of statutory payments immediately after filing the FPS reports on or before the date of payment.  On the HMRC PAYE Online account, they always end up allocated to the correct period.  You would not usually have the info to file an EPS for CIS tax suffered until after the 5th, but as the period end is in the header, I think it would be allocated to the correct period even if submitted before the 5th.  The same applies to an EPS for no payroll payments in the month, but assuming that the unpaid employee(s) has been set up as a joiner and notified on a previous FPS, you can file an FPS to report a nil payment before the 5th.

Unless you have clients who suffer CIS tax deductions, take your holidays between the 6th and the 19th!

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By pauljgoodman
02nd Feb 2015 17:13

Well, it was a regular client with no PAYE to pay who has suffered CIS set offs from main contractors.  I received several months' worth the other day, and entered them in Moneysoft, only to find that EPSs were due for these old months.  I then changed that and entered the total in the current month.  But having booked a holiday covering the 6th to 20th later in the year, it occurred to me that I was a bit stuck.  As you point out, I won't have the details from the contractor by the 5th, and in all probability, not before the 19th anyway.  So my question was if I filed this after the 19th, is there a penalty?  Thank you, Euan, for pointing out that the EPS will be allocated correctly by HMRC.  I'm still curious about penalties, though.  

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By onicholson
03rd Feb 2015 00:11

Penalties
There's an automatic penalty for not filing either at least one FPS in a tax month or a 'nil' EPS containing either a No Payment for Period or Period of Inactivity to cover that month. If you filed at least once, you don't get that penalty. An FPS with zero pay is sufficient for these purposes.

There's an automatic penalty for filing an FPS late without providing a late filing reason, where late simply means the date of submission is after the date of payment in the submission.

There are no automatic penalties for not sending enough submissions.

HMRC will issue a notice if they detect that you've filed fewer than expected, e.g. your payroll is weekly and you don't submit anything for a given week or you only send in 5 employees instead of the normal 100. It's only informational/a warning as they can't be sure whether you should have sent an FPS. That's not to say that there are no penalties, just that there are none that are automatically applied. If a direct inquiry or inspection turned up a large number of missed submissions and/or late submissions that misused the late reason, they will likely take a dim view of it.

The tax month in the EPS is heavily restricted, e.g. month 5 (August) can be filed between 6th July and 19th September. Once you pass the 19th, you can't file another EPS with recoveries for that month.

If you miss a month's recoveries (statutory payments and CIS suffered), the client simply doesn't have any recoveries that month from HMRC's point of view. Their liabilities are calculated at the 19th of the following month and that is largely final. Your client can either pay the amount owed without recoveries or pay with recoveries and argue with debt management over what is owed when they query the shortfall.

If you later file a submission, it will go into the indicated tax month. HMRC work from the YTD figures so, for example, missing month 10's recoveries and filing them with month 11 would give the client no recoveries in month 10 and two months of recoveries in month 11.

As an aside, there is a tax year in the submission so you can continue to update totals for the previous 6 years if you miss the month 12 submission or make changes.

Clear as mud. Hopefully they'll update their back end to be a little more real time sometime soon.

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By 0098087
03rd Feb 2015 12:39

Oh dear, holidays. We have weekly payrolls. We are heading to the US in August and have to file from the US. No way out for us.

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Replying to lionofludesch:
paddle steamer
By DJKL
03rd Feb 2015 13:11

The Juggle

0098087 wrote:
Oh dear, holidays. We have weekly payrolls. We are heading to the US in August and have to file from the US. No way out for us.

 

Why I refer weekly payrolls to another firm if I cannot persuade client that monthly is a better idea.

Holiday logistics are a real pain, you need to leave enough time after previous month end to cover vat returns before you go and ensure you get past/very close to 5th of month re CIS returns before you leave, or will return before 19th.

I have found going away at say Easter not that bad as shorter holiday so can catch things on return before 19th, however we try to go for nearly three weeks in summer so  have had to shift all monthly payrolls to mid month and then leave on circa 13th to 15th to get back in time to cover CIS/PAYE etc on return.

 

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By 0098087
03rd Feb 2015 13:28

We couldn't shift monthly payrolls due to changes. We had one client who insisted on giving us the commission on the last working day of the month around 4pm. Thankfully we don't act for him anymore!

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By Paul Soper
03rd Feb 2015 15:11

On or before

Surely the holiday problem is one that can be resolved by filing before payment - I don't think there is any time limit to how early a report within the same tax year can be filed - if payments were to be identical through the whole year you file the lot at the beginning of the year, subject to your software solution permitting it.  Clear the lot and go on holiday with a clear conscience.  We lose enough sleep knowing that more often than not (especially at the year end) filing takes place after payment when it should be on... or before...

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By pauljgoodman
03rd Feb 2015 16:27

Thanks to all who commented.  I think that as long as I file an FRS every month for the relevant client, it won't matter if I file an EPS later than the software indicates.  I suppose we'll find out when the penalty regime kicks in. I am seriously considering passing most of the payroll work to a bureau, I seem to spend too much time worrying about it

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