Citation, commencement, effect and interpretation

1. —(1) These Regulations may be cited as the Income Tax (Pay As You Earn) (Amendment No. 3) Regulations 2014 and come into force on 6th October 2014.

(2) Regulation 2 has effect in relation to a failure to deliver a return to Her Majesty’s Revenue and Customs in relation to relevant payments made—

(a) on or after 6th October 2014, where the employer is a large existing Real Time Information employer; and

(b) on or after 6th March 2015 where—

(i) the employer is a small existing Real Time Information employer; or

(ii) a person becomes a new Real Time Information employer after 6th October 2014.

(3) In this regulation—

“large existing Real Time Information employer” means a Real Time Information employer which as at 6th October 2014 employs at least 50 employees;

“new Real Time Information employer” means a Real Time Information employer to which HMRC issues an employer’s PAYE reference after 6th October 2014;

“Real Time Information employer” means a person who is within regulation 2A (real time information employers) of the Income Tax (Pay As You Earn) Regulations 2003( 3 ) or who is treated by regulation 10 (application to agencies and agency workers), regulation 11 (application to pension payers and pensioners) or regulation 12 (application to other payers and payees)( 4 ) as an employer for the purposes of those Regulations;

“relevant payments” has the meaning given by regulation 4 of the Income Tax (Pay As You Earn) Regulations 2003 (relevant payments);

“small existing Real Time Information employer” means a Real Time Information employer which as at 6th October 2014 employs no more than 49 employees.

(4) For the purposes of paragraph (3) “employer’s PAYE reference” in relation to a Real Time Information employer means the combination of letters, numbers, or both, used by HMRC to identify a Real Time Information employer for the purposes of the Income Tax (Pay As You Earn) Regulations 2003 and the number which identifies that employer’s HMRC office.

Amendment of the Income Tax (Pay As You Earn) Regulations 2003

2.The Income Tax (Pay As You Earn) Regulations 2003 are amended by inserting after regulation 67H (payments and recoveries)( 5 )—

“ Penalties under Schedule 55 to the Finance Act 2009

Penalty: failure to comply with regulation 67B or 67D

67I. —(1) For the purposes of paragraph 6C of Schedule 55 to the Finance Act 2009(amount of penalty: real time information for PAYE) ( 6 ) , a Real Time Information employer which fails to deliver a return falling within item 4 in the Table in paragraph 1 of that Schedule in accordance with—

(a) regulation 67B (real time returns of information about relevant payments) ( 7 ) ;

(b) regulation 67BA (employees in respect of whom employer is not required to maintain a deductions working sheet) ( 8 ) ;

(c) regulation 67BB (employees paid in specific circumstances) ( 9 ) ;

(d) regulation 67C (modification of the requirements of regulation 67B: notional payments) ( 10 ) ; or

(e) regulation 67D (exceptions to regulation 67B) ( 11 )

as the case may be, is liable to a penalty of the amount set out in paragraph (2).

(2) Where a Real Time Information employer fails to deliver such a return and the number of persons employed in the period to which the return relates is—

(a) no more than 9, the penalty is £100;

(b) at least 10 but no more than 49, the penalty is £200;

(c) at least 50 but no more than 249, the penalty is £300; and

(d) at least 250, the penalty is £400.

Penalty: initial period

67J. For the purposes of paragraph 6C(3), (4) and (5) of Schedule 55 to the Finance Act 2009 (initial period), the duration of the initial period is thirty days.

Penalty: first failure to deliver a return in a tax year

67K. —(1)Paragraph 6C(4) of Schedule 55 to the Finance Act 2009 (unpenalised default) does not apply to any failure to deliver a return falling within item 4 in the Table in paragraph 1 of that Schedule in accordance with regulation 67B, regulation 67BA, regulation 67BB, regulation 67C or regulation 67D, as the case may be,—

(a) by a small existing Real Time Information employer or a new Real Time Information employer in the period 6th March 2015 to 5th April 2015; or

(b) for any tax year for which a Real Time Information employer operates an annual PAYE Scheme.

(2) For the purposes of paragraph (1)(a)—

(a) an employer is a small existing Real Time Information employer if at 6th October 2014 that employer employed no more than 49 employees; and

(b) an employer is a new Real Time Information employer if it is issued with an employer’s PAYE reference after 6th October 2014.

(3) For the purposes of paragraph (1)(b), a Real Time Information employer operates an annual PAYE Scheme for a tax year if for that year—

(a) all the employees are paid annually;

(b) all the employees are paid on the same date; and

(c) the Real Time Information employer is only required under regulation 69 (due date and receipts for payment of tax) ( 12 ) to pay HMRC annually. ” .