3 March 2015

This month [March] the government is tightening up the penalties for small businesses that report their payroll information late.

The NHBF is warning salon owners that HM Revenue & Customs is introducing a new system of monthly penalties from 6 March, for small businesses, or those with fewer than 50 staff.

It will mean an employer will incur a penalty if it submits its Full Payment Submission late, doesn’t send in the expected number of submissions or fails to send an Employer Payment Summary when it should.

The penalties are based on the number of employees a business has, with firms employing between one and nine staff at risk of a £100-a-month penalty, rising to £400-a-month for a business with 250 employees or more.

The new regime will bring small businesses into line with larger employers, which have been subject to penalties since October last year.

Businesses more than three months late with their submissions will risk an additional 5% surcharge on their tax and national insurance, and firms using more than one PAYE scheme will be charged penalties for each scheme they operate.

The change is being brought in as part of the government’s “Real Time Information” (RTI) system for reporting and submitting PAYE information.

NHBF president Paul Curry said:

For most salons this change should not involve a lot of extra work – salons should already be submitting payroll information regularly through RTI. However, the fact small salons will now be subject to potential fines and penalties means it is even more important owners make sure their payroll systems are robust and compliant.

“They also need to be regularly reviewing their system, and regularly speaking to their provider, to ensure they are submitting the right information at the right time.”