A Full Payment Submission is an electronic submission sent to HMRC. It contains employer & employee information, as well as payment information including pay and deductions made to each employee. This article looks at what can happen if an FPS is submitted late.

When Should an FPS be Submitted? What Happens if it is Submitted Late?

HMRC requires that an FPS is sent on or before an employee’s payday, even if HMRC is paid quarterly instead of monthly.

If an FPS is submitted late to HMRC they may issue a penalty notice. HMRC may also raise a specified charge based on an estimate of how much they think an employer should pay. HMRC will base the charge on an employer’s previous PAYE filling.

Under What Circumstances Will HMRC Issue a Penalty?

Typically, HMRC issues penalty notices on a quarterly basis. Employers may receive a penalty if:

• The Full Payment Submission (FPS) was submitted late
• The employer did not send the expected number of FPSs
• The employer did not send an Employment Payment Summary (EPS) when they did not pay any employees in a pay period

There are some circumstances when HMRC do not charge a penalty

These are:

• The employer’s FPS is late, but all reported payments on the FPS are within 3 days of the employee’s payday. However employers who persistently file after the payment date, even if they are within 3 days may be considered for a penalty.
• The employer is a new employer and they sent their first FPS within 30 days of paying an employee.
• It’s an employer’s first failure in the tax year to send a report on time

What are the penalties for filing a late FPS?

The Monthly penalties vary with the size of the company, as follows:

• 1 to 9 employees £100
• 10 to 49 employees £200
• 50 to 249 employees £300
• 250 or more employees £400

However, If employers are more than 3 months late with their FPS, they may be charged an additional 5% on top of the above.

Is There any Right of Appeal?

An employer can appeal against a penalty notice if they think the amount is incorrect, the penalty is not due or if the employer thinks they have a reasonable excuse for filing the FPS late. The appeals process can be slow and confusing. In our view it is better to be 100% compliant.

As outsourced payroll providers, we can take all this burden away from you and let you get on with running your business. It’s what we specialise in, so call us on 0121 422 0550 or contact us for an initial chat to see if we can help. Why not give us a call about outsourcing your payroll and let us deal with all the detail?