HMRC ditches automatic penalties for small employers

Many small businesses have welcomed the announcement by HMRC that it intends to move away from automatic penalties for tax to a less rigid approach.

As part of the drive, a “more proportionate approach” will be taken when small employers miss PAYE filing deadlines. This announcement follows on the back of HMRC accepting “reasonable excuses” when considering self-assessment missed deadline filings.

The introduction of real-time PAYE filing has not been without its challenges for many employers, and small businesses which use shift workers have come under particular pressure.

The news that HMRC is to be more pragmatic about such circumstances for companies which are generally compliant is a sensible move, enabling it to instead focus on persistent offenders. Until now penalties have been fixed, making no distinction between those who deliberately offend and those who make genuine mistakes.