PAYE/NIC New Late Payment Penalties
All employers will be subject to the new late payment penalties from May 2010. This includes payments of:-
• Tax
• National Insurance Contributions (Class 1, 1a) *Construction Industry Scheme deductions *Student Loan deductions.
The penalties payable will be calculated as follows on the amount of the late monthly or quarterly payment:-
• On the first late payment in a tax year – no penalty
• Thereafter, ignoring the first late payment in the year:-
Between 2 and 4 late payments a year – 1%
Between 5 and 7 late payments a year – 2%
Between 8 and 10 late payments a year – 3%
HMRC also have powers to charge penalties at 5% if an amount is outstanding for 6 months and again at 12 months.
Interestingly, if you can argue that you have a reasonable excuse for being late in your payment HMRC may waive the penalty. HMRC define reasonable excuse as something:-
• unusual
• that you could not reasonably have known would happen, and which you could not do anything to prevent.
If you do experience difficulties in keeping your PAYE payments up to date you can contact the Business Payment Support Service at HMRC: 0845 302 1435
