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Penalty for late PAYE registration

What will be the penalties, considering no tax at stake

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A new client has just told me he started employing two people back in February 2020. We'd originally set up the pay scheme starting September 2020, based on the client telling us he was starting to pay from September, but only later discovered he'd been paying since February. The amounts are above the LEL, but no tax or NI is actually due, so he should have registered for PAYE and filed RTI, but no loss to the exchequer.

I am trying to determine what penalties are likely to be due. Would it really be a case of £100 per month for each missed filing.

So February 7 months late = £700

March 6 months late = £600

etc.

Total £2,800 penalties less £100 for first late, so £2,700. This seems excessive, but I appreciate there is no logic in tax.

Has anyone been in this position before?

 

Thanks

Replies (14)

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By Paul Crowley
16th Sep 2020 17:57

No idea
But just submit and appeal all penalties using Covid as reason
Seems to work on CIS penalties, And EI Employment Intermediaries.
I would hope that CJRS fraud would be the current HMRC target

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RLI
By lionofludesch
16th Sep 2020 18:20

Last time I did a late one, no penalties were even mentioned.

Don't rely on this too much. It could well be Government incompetence.

But I agree with Paul - cite Covid as an excuse - you'd normally have noticed on one of your regular visits (ahem), but because of Covid, you couldn't visit.

It's one of the few upsides to Covid.

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By Matrix
16th Sep 2020 19:03

What a pain for you. Is there a loss to the employees though? If they have no other job then do you know if they are on benefits?

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Replying to Matrix:
By aiwalters
16th Sep 2020 19:12

I have no idea if the employees were on benefits. The theoretical 'loss' to the employees is that they won't get a NI credit for the relevant months, but we intend to do everything properly, and hopefully avoid penalties.

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Replying to aiwalters:
RLI
By lionofludesch
16th Sep 2020 19:52

aiwalters wrote:

I have no idea if the employees were on benefits. The theoretical 'loss' to the employees is that they won't get a NI credit for the relevant months, but we intend to do everything properly, and hopefully avoid penalties.

But you will know when they sign their starter declarations, won't you ?

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Replying to lionofludesch:
By aiwalters
17th Sep 2020 10:03

Well I would know if they were on taxable Jobseeker's Allowance, Employment and Support Allowance or Incapacity Benefit, but not if they were on Tax Credits, Housing Benefits, Universal Credits or other non-taxable benefits.

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Replying to aiwalters:
RLI
By lionofludesch
17th Sep 2020 10:46

aiwalters wrote:

Well I would know if they were on taxable Jobseeker's Allowance, Employment and Support Allowance or Incapacity Benefit, but not if they were on Tax Credits, Housing Benefits, Universal Credits or other non-taxable benefits.

How would you know?

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Replying to lionofludesch:
By aiwalters
17th Sep 2020 10:58

Because they'd have ticked the box on the starter form.

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Replying to aiwalters:
RLI
By lionofludesch
17th Sep 2020 11:06

aiwalters wrote:

Because they'd have ticked the box on the starter form.

Ah ok - you mean in general. I was thinking you were claiming to drill down into what type of benefit/pension/other job.

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Replying to lionofludesch:
By aiwalters
17th Sep 2020 11:28

Sorry for being unclear. Yes, I meant in general, not specifics.

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Replying to aiwalters:
RLI
By lionofludesch
17th Sep 2020 11:36

No, no - I should have realised.

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By SXGuy
16th Sep 2020 19:03

Never had a penalty yet. Just pick reasonable excuse as the reason when filing the rti submissions.

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Replying to SXGuy:
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By jules66
19th Sep 2020 23:02

Agree with above comment, choose the reasonable excuse option when filing. We've had a few over time that were late being set up/filed, never any penalties for late filing so far.

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By facucvivas
22nd Sep 2020 11:00

Just bear in mind that you wont be able to file any RTI returns for February and March as the scheme was set up in September. you can file from April onwards but not before.

if you want to submit for February and March you will have to call HMR C and get the start date changed to February

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