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HMRC Guidelines - Late Reporting
HMRC Guidelines - Late Reporting
Rebecca Russell avatar
Written by Rebecca Russell
Updated over a week ago

Real Time Information – Late Returns

When are penalties charged?

Penalties can be imposed if:

  • Your FPS is late

  • You did not send the expected number of FPS

  • You did not send an EPS in a month where you did not pay any employees

You will not be charged a penalty if:

  • You are a new employer and sent your FPS within 30 days of paying an employee

  • It is your first failure in the tax year to send a report on time

How much will an employer pay per PAYE scheme?

When will HMRC issue the penalty?

HMRC issue penalty notices on a quarterly basis and will detail:

  • What is owed

  • How to pay

  • The process to follow if you disagree with the decision, you can appeal if you think:

  • A penalty is not due

  • The amount is incorrect

  • You had a reasonable excuse

Reasons for grounds of appeal

  • data on the returns was incorrect

  • death or bereavement

  • filing expectation incorrect

  • filed on time

  • fire, flood or natural disaster

  • ill health

  • IT difficulty

  • missed correction/easement

  • no longer have any employees

  • no payments to employees

  • theft or crime

  • other - only use this option if your reason for appeal does not fall into any of the above categories in the online system

Real Time Information – Inaccurate Returns

When are penalties charged?

Penalties may be charged if:

  • A data inaccuracy has results in tax being unpaid, under calculated or over calculated AND

  • It was the result of a careless, deliberate and/or concealed mistake.

An error is not mitigated because an employee or an adviser has done something on your behalf. You must ensure that anything not done directly by the employer is checked for accuracy.

Penalties won’t be charged if you have shown reasonable care by doing things such as keeping accurate records and speaking with HMRC Tax Advisers if you unsure about anything.


Inaccuracies fall in to two categories:

  • Disclosed – Called an ‘Unprompted Disclosure’

  • You as the employer have told HMRC about the inaccuracy before it has been found by the HMRC

  • Undisclosed – Called a ‘ Prompted Disclosure’

  • The inaccuracy has been found by the HMRC, or has been reported to the HMRC after they have already started their checks.

An unprompted disclosure may reduce a penalty to nil, and the minimum penalty for an unprompted disclosure is less than a prompted one.

Reducing a Penalty Charge

A charge can be reduced depending on how much assistance the employer has given the HMRC. The HMRC call this ‘telling, helping and giving’ and examples of this include:

  • Agreeing that there has been an issue and how and why it occurred

  • Giving the HMRC a view of the extent of the issue as soon as you are aware

  • Answering questions in full and helping the HMRC understand your records

  • Being prompt in responding to correspondence, and attending meetings

  • Giving the HMRC access to documents they do and also do not have access to

Delays in any of the above will not automatically remove your entitlement to a penalty deduction but you may not receive a full reduction.

What is the penalty charge based on?

The penalty charge will be a percentage of the HMRC’s Potential Lost Revenue.

You would need to correspond with the HMRC Officer dealing with your case to assess what this would be.

Penalty Range

There are 6 ranges a penalty could fall in to. The percentage in that range is then applied to the PLR.

From this the HMRC will decide upon how well you cooperated under ‘telling, helping, giving’ which may reduce your penalty:

  • Telling – up to 30%

  • Helping – up to 40%

  • Giving access to records – up to 30%

Example – Careless Inaccuracy, with agreed help from the Employer. Prompted Disclosure.

PLR has been determined as £10,000.00

19.5% of £10,000.00 = £1,950.00

Full Details of Penalty Charges relating to inaccurate submissions can be found HERE.

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