ESM2190 | Employment Intermediary Reporting: Record Keeping Requirement - Penalties and Appeals

From HM Revenue & Customs · Employment Status Manual

Income Tax (Pay As You Earn) (Amendment No.2) Regulations 2015

Section 98 Taxes Management Act 1970 as applied by (Statutory Instrument No 931/2015)

Failure to File

Where a quarterly return is not filed or filed by the reporting period deadline, the late the provisions of S98 (1) (b) TMA 1970 apply. The late and non-filing penalties are issued via the HMRC computer systems as an automatic process.

Fixed Penalty

The maximum fixed penalty chargeable for each offence is up to £3000.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Daily penalty which can be imposed (not automated).

Up to £600 daily penalties for each day the Quarterly Return remains outstanding after the fixed penalty for failure to provide HMRC with a completed Quarterly Return by the specified filing date has been imposed.

Incorrect or incomplete return (not automated).

S98 (2) TMA 1970 provides a penalty of up to £3000 for providing incorrect information, document, declaration- fraudulently or negligently.

These will be imposed proportionately. Issues where a penalty would typically be imposed will include:

The payments declared for the workers contained upon the return are significantly incorrect and understated
Some workers have been omitted from the return
Identity details have been omitted on a significant number of occasions.
It is stated upon the return that some workers were not treated as employees of the employment intermediary for income tax & NIC purposes because RTI/PAYE was already operated on their payments elsewhere up the contractual chain and this was not in fact the case.

This list is not exhaustive.

There is a right of appeal - all appeals and cancellations will be handled by the HMRC Employment Intermediaries Co-ordination Unit.