RTI late filing penalties

The intended purpose of real time information (RTI) reporting of payroll data is to update universal credit accounts with individuals’ actual pay within days of their pay date. RTI reporting also allows employees to view their latest tax position through their online personal tax accounts.

However, those accounts won’t be up to date if employers don’t report payroll data on time. HMRC should receive the full payment submission (FPS) report on or before the employees’ pay date, and automatic penalties can apply if the RTI reports are submitted late.

The best way to avoid penalties for late RTI reporting is to do your payroll tasks in this order:

  1. Run the payroll
  2. Make the RTI submissions
  3. Pay the employees

Currently the HMRC computer won’t issue a penalty if the RTI submissions are made within three days of the employees’ payday. This temporary grace period isn’t an extension to the deadline; if you consistently file within this three-day window HMRC may write to warn you that a penalty will be issued. You are permitted one late RTI filing in the tax year before a penalty is issued.

If you have had to file an FPS late, get your excuse in early by including the appropriate code letter in the late reporting field in the submission. The code for having a reasonable excuse is “G”.

If you receive a penalty notice which you don’t agree with, you need to appeal against it within 30 days. This can be done by letter or online, and we can help you with that.