HMRC Updates its GNS – The Non-Filing Message
On 13 May 2014, HMRC posted a message on its ‘What’s New’ section detailing updated information on its Generic Notification Service (GNS) messages. These started at the end of 2013 but were postponed in February 2014 given the number of incorrect messages that were reported as going out and the deferral of the automatic penalty regime. As a recap, eventually, there will be 4 messages:
- Non-Filing – i.e. ‘you have not sent in a FPS and we were expecting one’
- Late Filing – i.e. ‘the date that we received the FPS was after the Payment Date field on your submission, therefore, you have not filed on or before’
- Late Payment – i.e. ‘you should have paid by the 19th / 22nd and you did not’
- Continuing Late Payment – i.e. ‘you are still not paying by the 19th / 22nd’
These messages are important as they are an indication that HMRC has recognised non-compliance, according to their records. All of these non-compliances will be subject to the penalty regime when this is introduced as follows (postponed from April 2014):
- Late filing penalties from 06 October 2014
- Late payment penalties from 06 April 2015
In April, HMRC advised HMRC have confirmed that the Non-Filing GNS messages have started to be issued again and will relate to perceived non-filing in Month 01 of the 2014/15 tax year. We focus on this particular message below:
The Non-Filing FPS Notification
Where HMRC are expecting the Full Payment Submission (FPS) and this has not been received, the non-filing GNS message will be issued. This will indicate that they were expecting one or more FPSs in the tax month but they have not been received. The Notification will be issued immediately after the end of the tax Month, advise employers about the introduction of automatic late-filing penalties from October 2014 and that if no employees were paid in the period then the correct course of action is to send the Employer Payment Summary (EPS) advising NIL activity.
The revised text, reads as follows:
“HM Revenue & Customs (HMRC) records show that you haven’t sent all of the Full Payment Submissions (FPS) that we expected for the period indicated. You must send an FPS each time you pay your employees.
From October 2014, if you don’t send your FPS on time you may incur in-year filing penalties. Please make sure that you send your FPS on time in future.
If you didn’t pay any employees within that tax period, you should let HMRC know by sending a no payment Employer Payment Summary (EPS) by the 19th of this month.
If you have sent all your returns or you have notified HMRC in the last five days that you no longer employ anyone, you don’t need to contact HMRC.”
The Notification will not apply to the following groups and should be ignored:
- An employer who is using HMRC’s temporary relaxation on small employers
- An employer who is using one of HMRC’s concessions where they do not have to report on or before the time that the payment is made
- ‘Exempt’ employers
 Comment
It is so important that employers recognise that these GNS messages are not penalties but are indications that a penalty situation has arisen, according to HMRC. Therefore, employers need to consider whether they are actually non-complaint and make sure that they change their processes pre-automated penalties. How will HMRC recognise late filing? Simply, systems will compare the Payment Date field on the FPS to the date that the FPS was actually received. If the FPS was received after the Payment Date, this is late filing. How will HMRC recognise that there is a non-filing situation? When I queried this with HMRC last year, I was told that HMRC create an ‘expectation’ on their systems, based on the pay frequency that is declared on the FPS. For example, if a payroll is weekly then HMRC have an expectation to receive at least 4 FPSs. Similarly, if the pay frequency is monthly, HMRC have an expectation to receive at least 1 FPS. The HMRC briefing of 13 May 2014 seems to confirm the explanation that I received and said that the expectation is based on a PAYE scheme’s ‘previous filing history of how often they run their payroll’. Although the exact logic behind HMRC’s systems remains a mystery, the explanation does make total sense – if you have a monthly payroll, there is a great possibility that people will be paid and, therefore, a FPS needs to be submitted. Similarly, if you have a weekly payroll, it is probable that employees will have been paid 4 times in the tax Month, therefore, 4 FPSs should have been sent. However, according to feedback that I have received in the last few days, employers are receiving the late filing and non-filing GNS message even when the PAYE scheme has reported correctly. For example, some:
Some examples of these have been sent to HMRC for them to review the logic in their IT systems, which are generating the GNS messages in the first instance. Regardless of the fact that some messages appear to have been issued mistakenly, there are probably many more that have been issued correctly and employers are being treated as non-compliant. Some tips to avoid both the late filing and the non-filing GNS:
Note that, from April 2014, a NIL EPS can be submitted in the tax Month itself, rather than having to wait until the start of the new tax Month (as was the case pre 06 April 2014). Given that the non-filing GNS is generated on the first day of the tax Month, employers with a known period of inactivity or no payment dates may wish to make use of the in-Month facility. However, if the employer does not know that a NIL EPS has to be generated until the tax Month is completed, this can still be sent, as long as it reaches HMRC by the 19th in the ‘EPS Window’ (20th – 19th). In this case, whilst the non-filing GNS will still be received, automatic penalties are avoided come the advent of the regime in October 2014. There are some very worthwhile links to Websites in ‘Further Information’ below. Please read this, remembering that the GNS messages are warnings of perceived non-compliance but, from 06 October 2014, may result in the late filing automatic penalty regime being instigated. |
Further Information
- HMRC – Further Updates to Electronic Messages
- HMRC – Background Information to the GNS
- Payroll Help 05 March 2014 – Generic Notification Service Messages Postponed
- Payroll Help 15 April 2014 – New Late Filing GNS Messages
- Payroll Help 14 January 2014 – RTI and the Late Reporting Reason
- HMRC – PAYE if your Business Closes or Changes
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