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HMRC internal manual

Employment Status Manual

Employment Intermediary Reporting: Record Keeping Requirement - Penalties and Appeals

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)

(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.