Avoid Late Payment Penalties

Avoiding Penalties
To make sure you avoid penalties businesses need to pay the right amount of PAYE, student loan deductions, CIS and NIC on time.

Making Payments
Payments made by cheque must be received by HMRC by 19th of each month/quarter and electronic payments by 22nd of each month/quarter (take the time to check what day of hte week these fall on so they do not arrive late.

Late Payment Warning letter
HMRC may send you a warning letter if you do not pay on time. The letter will explain how to avoid a penalty in the future and a reminder to make a payment if you have not already done so.

Note it does not mean a penalty will definately be charged and you may get a penalty even if you do not receive a letter.

Penalty Notifications
If late payments are made in the 2010/11 tax year HMRC will send penalty notifications after the end of the year (HMRC has 2 years to send a penalty letter). The letter will also provide details of how to appeal.

Additional Penalties for monthly and quarterly payments over six months late
If you have still not paid a monthly or quarterly amount in full, after six months you may have to pay a penalty of 5 per cent. A futher penalty of 5 per cent may be charged if you have not paid after 12 months. These penalties may be charged in addition to the panalties for monthly and quarterly payments described in the previous section and apply even where only one payment in the tax year is late.

Penalty Charges