HM Revenue & Customs (HMRC) plans to take a balanced approach rather than issuing late filing penalties for sending PAYE information late automatically when a deadline is missed to focus on the serious defaults on a risk-assessed basis.

Even though the late filing penalties already apply to employers with 50 or more employees, this ‘risk-based’ approach will now apply to employers with fewer than 50 employees submissions that were late from 6 March 2015 and employers with 50 or more employees from 6 January 2015.

The purpose of this approach is to make employers report on right time so that there will no penalties to charge at all. HMRC also plans to use targeted communications, webinars to educate employers about their filing obligations with the help of this approach.

Even if employers are not charged with penalty, they must file PAYE information which is required by law. If they fail to do so, penalties can be charged to them in the future. Moreover, the deadlines and requirement for sending PAYE information and the requirement for sending is not changed and remains same.

The amount of penalties charged depends on the number of employees that employers have. Having 1-9 employees, employers can be charged with £100 as penalty. Those employers with 10-49, a fine of £200 will be charged. Likewise, employers with 50-249 employees and 250 and more will be charged with penalty of £300 and £400 respectively.

If the employer is 3 months late, then he/she can be charged an additional penalty of 5% of the tax and National Insurance which should have been reported. And, if HMRC discovers that any deliberate errors, there will be even more harsh penalties.

By using the Penalties and Appeals System (PAS) on HMRC online, employers can appeal electronically. The employers receiving a late filing penalty notice for tax year 2014 to 2015 quarter 4 but have filed within three days of the reporting deadline can appeal.