From May 2010 you may have to pay a penalty if you do not pay the PAYE due each month, on time and in full.
What if I do not pay on time?
HMRC intend to implement the late penalties for payments due from May 2010. From then on, you may have to pay penalties if you make more than one PAYE payment late. The new penalties will apply to all employers. This includes large employers (who are required to pay electronically) and will replace the Mandatory Electronic Payment surcharge.
You should tell us as soon as you know that you will not be able to pay on time and then this will help avoid a penalty being charged.
How will the new penalties work?
The penalties will be a percentage of the amount you pay late. They will start at 1% and increase to 4% depending on the number of late payments in a year.
There are also penalties of 5 per cent if any of the PAYE due is still not paid after six months, and again after 12 months.
You will not get a penalty if you have a reasonable excuse for being late or if you are only late once in a tax year (unless that payment is more than six months overdue). You can also appeal against the penalty if you disagree with HMRC.
November 24th, 2009
