PAYE Late Payment Penalties

I run a small business, employing 10 employees who are all paid monthly. I recently read an article suggesting that if I fail to pay the PAYE and NIC liabilities on time I could face a penalty. Is this correct?

1st August 2010

A new penalty regime was introduced with effect from 6 April 2010 and late payment penalties will now apply to monthly, quarterly or annual PAYE payments. It will include all income tax and national insurance contributions due under PAYE, the Construction Industry Scheme and student loan deductions.

There will also be late payment penalties for not paying amounts due annually on time and in full, including Class 1A National Insurance Contributions due on forms P11d and Class 1B National Insurance Contributions due on PAYE settlement agreements.

The amount of the penalty will be calculated on a sliding scale of percentages ranging from 1% to 4% and be dependent on the number of times the employer has been late making payments during the past tax year. The new penalties apply to all employers and CIS contractors, regardless of the size of the business or normal frequency of payment.

If you are concerned about the possibility of a penalty please contact your local TaxAssist accountant for more information.

By Jo Nockels

Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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