Accountants in London may be interested to learn that HMRC is going to alter its policy for sending out penalty notices to employers who make late monthly payments.
At the moment, the Revenue send out penalty notices at the end of each year. This move has been criticised because employers who are not aware that they have errors in their payment systems are punished and mistakes that could easily have been rectified continue while the fines amass.
In the Revenue’s defence, it says the total penalty does not become known until year end because the rate is dependant on the number of times an employer has made a late payment.
However, when Real Time PAYE reporting comes into play in October 2013, employers will need to submit both returns and payments on a monthly basis and HMRC has said late payment notices will then be sent when they occur.
Tina Riches from the Chartered Institute of Taxation said the Revenue does sometimes send out letters warning that a penalty might be charged, but these letters are rather vague. She believes that it will be a much better system when HMRC sends out notices during the course of the year so that employers can make the necessary adjustments.
Meanwhile, the DWP is coming under increasing pressure to remove the requirement for small businesses to automatically enrol their employees in a pension scheme. The Treasury is keen for the exemption to be made, but the Department for Work and Pensions is less so.