First penalties coming soon for rural businesses under RTI scheme

The first penalties for late real-time PAYE returns will be applied from 6 March next year for businesses with under 50 employees says HMRC, which has also just announced that electronic messages will be sent soon to all employers to let them know if a penalty will apply to them based on the number of employees that they have reported.

Catherine Desmond, Partner in the Landed Estates and Rural Business Group of UK top 20 Chartered Accountant Saffery Champness says: "Businesses employing 50 or more people will face penalties from 6 October, but many farms and land-based enterprises have fewer employees so they can expect to face automated in-year penalties from 6 March next year should they become due.

"HMRC has said that over 95 per cent of PAYE schemes making payments direct to individuals are successfully reporting in real time, so from that it would seem that the number of penalties will be low. HMRC has also said, however, that those who have had most difficulty in adjusting to reporting in real time are small businesses, which may well include farms and small estates, but this staged approach means that they have a little more time to get used to complying with the new arrangements before a penalty becomes due.

"The size of penalties imposed will depend upon the number of employees in a scheme and how late you are with filing. There are new online appeal procedures for those who feel that they have a reasonable excuse for submitting a late return."