HM Revenue & Customers has announced that smaller contractors will no longer automatically receive a fine if they fail to submit their PAYE details on time. This move aims to bring a more considered approach to tax duties.
Flexible workers and employers with less than 50 staff will no longer be handed an automatic fine if they missed the 6th March deadline this year. This change has been hailed by the Association of Taxation Technicians (ATT) as a positive step forward.
HMRC is believed to have made the announcement due to the considerable time and manpower it currently requires to deal with the thousands of automatic penalties issued, which actually equate to very little money.
A statement by HMRC said: “This approach will enable HMRC to concentrate more resources on the more serious failures to comply, and to focus on educating employers about their filing obligations through targeted communications, webinars and Employer Bulletin articles.”
Contractors and freelancers who submit their PAYE details within three days of the deadline will avoid a £100 fine; however, the president of the ATT, Natalie Miller, has stated that HMRC must educate them about the importance of the filing process.
She added: “If HMRC do not explain their approach then there is the concern that some of these employers may end up becoming serial late filers because they will see the penalty system as an empty threat.”
The tax authority will monitor the impact of the new rules during the next nine months, with a full review expected in April 2016.