Today marks the first year of the introduction of fundamental changes to the PAYE penalty regime, but research carried out by RSM Tenon has shown that most SME business owners support higher penalties imposed on those that file or send back their tax return late.
Since April 2012, employers have faced tough penalties for late payment of monthly PAYE and NIC bills, even where they have been only one day late. Today marks the deadline for the end of year returns with balancing payments being due on 19th July.
But despite these tougher penalties, the RSM Tenon Business Barometer, a quarterly survey of senior management in small and medium sized enterprises found that one in three SMEs said they thought the new penalties were fair, with nearly ten per cent of these saying they strongly agreed that this was the case.
Only 36% of UK SMEs think that the new penalty regime is unfair, with nearly a quarter saying they remain undecided.
Paul Belsman, RSM Tenon’s Head of Tax, said: ‘When these new penalties were introduced I think that many employers didn’t appreciate the potential impact of them – a 1% penalty doesn’t sound too bad but when it is applied to the monthly PAYE bill the actual penalty can be significant – and this applies whether they are one day later or ten days late.
‘Despite this, our research suggests that many employers are supportive of this and seem to accept that HMRC has to take a much tougher stance with the tax regime and as a result, I think we’re all far less tolerant of taxpayers not fulfilling their obligations.’
For more information on PAYE returns for employers go to: www.hmrc.gov.uk/PAYE