Late Filing Penalty Regime for Payroll Real Time Information (RTI): What UK Employers Must Know in 2026

Excerpt:
Discover the RTI late filing penalties shaking up UK payroll compliance in 2026. From automated fines based on employee numbers to a new points system, learn how to avoid costly HMRC charges and stay penalty-free.[1][2][3]

Introduction to RTI and the Late Filing Trap

Real Time Information (RTI) requires UK employers to submit payroll data to HMRC on or before each employee's payday via Full Payment Submission (FPS).[2][4] Missing this triggers the late filing penalty regime, which has toughened in 2026 with automated fines, a points system, and surcharges for persistent delays.[1][3][10]

Whether you're a micro employer with nine staff or a large firm with hundreds, understanding these rules prevents thousands in avoidable fees. HMRC offers a three-day grace period for minor slips, but repeated issues lead to escalating penalties.[1][2]

How the RTI Late Filing Penalty Regime Works

HMRC's system automatically flags late FPS or Employer Payment Summary (EPS) submissions. Key rules include:

• Three-day buffer: All employers get up to three days late without penalty, but persistent filers within this window may face contact or fines.[1][2]
• Payday rule: FPS must arrive on or before payday, even for bonuses or off-cycle payments. Late submissions require a 'late reporting reason' code.[1][2]
• Micro employer relief (historical note): Until April 2016, tiny firms could file by month-end, but this ended—strict payday rules now apply universally.[1]

In 2026, penalties scale by PAYE scheme size (employee count):

One penalty-free late filing per year applies if under three days late.[3]

New in 2026: Penalty Points System and Surcharges

HMRC's points system targets habitual offenders:

• Each missed deadline earns one point (monthly filers).[3]
• 5 points triggers an extra £200 fine on top of standard fees.[3]
• Points expire after six months of perfect compliance.[3]

After three months of non-filing, a 5% surcharge hits—calculated on unreported tax and National Insurance. For high-payroll firms, this can exceed initial fines.[3]

Late final submissions (by 5 April tax year-end) follow Schedule 55 Finance Act 2009: £100 per 50 employees per month.[1][4]

Additional RTI Penalties to Watch

Beyond filing:

• Inaccuracy penalties: Charged if data lacks 'reasonable care'.[2][8]
• Late PAYE payments: Percentages of unpaid amounts, plus interest; escalates at 6/12 months.[2]
• EPS failures: Due by the 19th of the following month; late ones attract similar fines.[4]

P11D(b) forms for 2025-26 must file online by deadline, with £100 per 50 employees monthly for delays.[1][5]

Real-World Impacts and Compliance Costs

A single late FPS for a 100-employee firm costs £300 monthly, plus points risking £200 more.[3] Repeated errors compound with interest, corrections, and HMRC queries—straining teams and cash flow.[2] In 2026, automated checks make evasion impossible.[6]

RTI Best Practices: Stay Penalty-Free

Follow this checklist from payroll experts:

• Submit FPS on or before payday—even at 11:59 PM.[2][3][4]
• Use payroll software with 'late reason' fields for unavoidable delays.[1]
• Mark final FPS/EPS as 'final submission' by tax year-end.[4]
• Run corrections in the next FPS for current-year errors.[4]
• Track deadlines: Monthly/quarterly PAYE aligns with RTI.[2]
• Outsource to pros like Cheshire Business Accountants for audit-proof payroll.[2]

Perfect compliance wipes points and avoids surcharges—saving thousands annually.

Conclusion: Act Now to Dodge 2026 Fines

The RTI late filing penalty regime is stricter than ever, with size-based fines, points, and surcharges enforcing payday precision.[1][3][10] Review your payroll process today—contact Cheshire Business Accountants for tailored advice and risk-free compliance.

Tags: RTI penalties, late filing fines, HMRC payroll, UK employer compliance, PAYE deadlines, 2026 tax rules, FPS submissions, payroll best practices

Category: Payroll & Tax Compliance

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Sources

1. https://www.rossmartin.co.uk/penalties/1246-tax-penalties-rti
2. https://www.paycaptain.com/post/key-payroll-dates-and-deadlines-uk-employers-need-to-know-in-2026
3. https://ibissandco.com/tax-tips/what-is-rti-for-payroll/
4. https://payfit.com/blog/hmrc-rti-submissions-explained/
5. https://www.gov.uk/government/publications/employer-bulletin-february-2026/february-2026-issue-of-the-employer-bulletin
6. https://www.youtube.com/watch?v=xR7pdPMyKok
7. https://thetaxcom.co.uk/uk-resident-landlords-guide-hmrc-payroll-penalties-for-late-filing-and-late-payment/
8. https://www.tolley.co.uk/tax/guidance/rti-penalties
9. https://www.litrg.org.uk/news/missed-self-assessment-deadline-dont-panic-heres-what-do-next
10. https://www.jsca.co.uk/understanding-hmrcs-rti-late-filing-penalties-and-the-return-of-direct-recovery-of-debts/