From May 2010 late payment penalties apply to periodic PAYE/National Insurance payments by employers.
The late payment penalties apply to all employers and contractors and to monthly, quarterly and annual periods of PAYE starting on or after 6 April 2010.
The PAYE amounts covered are:
- Monthly, quarterly or annual PAYE
- Student loan deductions
- Construction Industry Scheme (CIS) deductions
- Class 1 National Insurance (NI) contributions
- Annual payments of Class1A and Class 1B NI
- HMRC determinations of further tax payable
- Penalty rates
You will not be charged a penalty if only one PAYE amount is late in a year, unless that payment is over 6 months late.
Penalties are calculated as follows and are applied to the total that is late in a tax year:
- 2 to 4 late payments – 1%
- 5 to 7 late payments – 2%
- 8 to 10 late payments – 3%
- 11 or more late payments – 4%
If you have still not paid a monthly or quarterly amount in full after 6 months a further penalty of 5% may apply, with a further 5% if not paid after 12 months.
Further guidance can be found from the HM Revenue & Customs website.
If you would like to know more about PAYE/NI Late Payment Penalties or discuss outsourcing your company’s payroll, contact Robin Mead at Payplus on 0800 018 0590 email@example.com or request a quick quotation.