Small businesses with less than 50 employees will be granted three days’ grace for late PAYE submissions before penalties will be imposed, HM Revenue and Customs (HMRC) has confirmed.

The PAYE late filing penalties will apply to small business employers with fewer than 50 employees from 6 March 2015.

HMRC has revealed late payment penalties will continue to be reviewed on a risk-assessed basis as opposed to automatic fines.

In a bid to prevent unnecessary PAYE penalties being issued, HMRC has confirmed it will be shutting up to 15,000 PAYE schemes in the coming weeks that have not been required to make a PAYE report since April 2013 and appear to have terminated.

HMRC will subsequently notify the affected schemes to inform them of the planned closures and what to do if they should still be operating PAYE.

The tax authority has also published a discussion document to scour views on potential improvements to the way in which PAYE penalties apply for failure to pay outstanding fees or to meet deadlines for returns or registration.

With HMRC delivering more digital-based services for customers, the organisation is looking to garner opinion on the high-level issues affecting SMEs across the UK.

HMRC appreciates that the vast majority of its customers meet their obligations in full and on time, so its approach toward a small minority of people and businesses needs to work as well as possible.

This is why it is consulting small business owners on new ways to better differentiate between deliberate and persistent non-compliers and those who may make a simple occasional error, for whom alternative interventions are more appropriate.

Any taxpayer, tax credit claimant, agent or representative body wishing to get involved in the discussion on HMRC penalties can send an email response to [email protected] or write to HMRC, Tax Administration Policy, Room 1C/06, 100 Parliament Street, London SW1A 2BQ.

If you are having issues with your payroll please call 01246 233108 or view our website www.innspiredaccountancy.co.uk should you need a quotation for this service.