Any questions? I was ill over Christmas and forgot to submit my FPS – help!

We regularly receive queries via our website. We do not give advice, but we try to signpost sources of further information and support. Some of the replies might be useful to others, so occasionally we will post them anonymously as ‘question and answer’ news items. We have received questions recently, such as the one below, on what the implications are if you are late in submitting an FPS.

Please note – this is posted as a ‘news’ item, which means the information and links are not reviewed and updated. You should not rely on it without checking the full facts of your case with HMRC or a tax adviser.

Question: I am a care and support employer and pay my PA four-weekly. I was struck down by Aussie Flu over Christmas and although I entered all the details of my PA’s pay for the four-week period ending in December into my payroll programme, Basic PAYE Tools, I must have forgotten to the press the submit button. I only just noticed that the FPS was unsubmitted when I went into BPT to process my PA’s most recent pay. I’m worried that I’ll now get a fine. Please help.

Answer: Thank you for your email to the Disability Tax Guide website. We are a small charity and are not able to give specific advice, however here is some general information that I hope will be useful to you.

Most employers must submit information electronically to HMRC each time they make a payment to an employee via a Full Payment Submission (FPS). If they do not do this, then they run the risk of incurring penalties.

If this is the first time you have missed submitting an FPS on time, then do not worry too much – in all cases, the first late submission of the tax year is ignored. You may, however, still receive a ‘generic’ notice about your late filing from HMRC – to try and help you avoid making the same mistake again:

If this was not the first time you have missed submitting an FPS on time, the failure may well attract a penalty – the details of how the penalty will be calculated are on GOV.UK, but broadly the penalty will be determined by the number of employees. The minimum penalty is £100 (applied per month, but charged quarterly). An additional tax-geared penalty may be applied if a return is outstanding for three months or more.

However, if you were ill during Christmas, it may be the case that you have a ‘reasonable excuse’ for not submitting your information on time. If so, then no penalties will be due, even if this is your second or subsequent failure. Our understanding is that HMRC are likely to accept reasonable excuses from taxpayers who are generally compliant without further investigation although it depends on the circumstances of the individual case. This is so that they can concentrate their efforts on the more serious defaulters on a risk-assessed basis.

If you have a valid reason for sending your FPS late and use HMRC’s Basic PAYE Tools (BPT), you can tick the late submission box and give your reason. By ticking the check box highlighted below a list of reasons will be displayed which includes ‘reasonable excuse’.

If you do not tick the check box or for whatever reason HMRC still send you a penalty even though you have ticked the checkbox and selected ‘reasonable excuse’, then do not panic. 

Online filers are able to appeal online against a filing or payment penalty, using HMRC’s Online Service. Once you have logged in, select ‘Appeal a penalty’.

From the options you are given (A-H) ‘G’ is the one to use if you think you have a “reasonable excuse”. HMRC may ask you some questions about your ‘reasonable excuse’ before accepting it.

You can also send a late filing appeal in writing to:
National Insurance Contributions and Employers Office
HM Revenue and Customs

You can find out more about what happens if you do not report your payroll information on time on GOV.UK.

It is important to note that HMRC have different penalty regimes – for example: late final submission of the tax year, late payment of PAYE tax and NIC and inaccurate submissions. For more information on all aspects of getting things wrong, including more on generic notification messages and reasonable excuses, visit our website.