| At the start of the tax
year new late payment penalties were
introduced for PAYE and other payments due
from employers. The new rules apply to
almost all employers and contractors,
whether they employ one or a hundred
employees. The rules apply to monthly,
quarterly and annual periods of PAYE
starting on or after 6 April 2010. HMRC
can impose late payment penalties on PAYE
amounts due that are not paid in full on
time, including:
- monthly, quarterly or annual PAYE;
- student loan deductions;
- Construction Industry Scheme
deductions;
- Class 1 NIC; and
- annual payments of employers' Class
1A and Class 1B NIC.
HMRC have now amended their guidance to
include comments on so-called ‘warning
letters’. HMRC state:
‘The letter is only to let you know
that HMRC think you have made a PAYE
payment late and that a penalty could be
charged. It is not a penalty notice and
you can’t appeal against it.
Importantly, it does not mean a penalty
will definitely be charged, and you may
get a penalty even if you do not get a
letter.
If you agree that you have made a late
payment, you should make sure you pay on
time and in full in future. The next time
you pay late you may become liable to a
penalty. HMRC will contact you before a
penalty is charged. If they charge a
penalty they will send you a penalty
notice.
If you believe you have received a
letter in error, perhaps because you have
already paid, have a time to pay agreement
or have a ‘reasonable excuse’ you don’t
need to contact HMRC yet. But you may find
it helpful make a note of why you don’t
think a penalty is chargeable in case HMRC
contact you about penalty action in
future.’
If you receive a letter but have paid
on time, it may worth telling HMRC that
their records are currently wrong to avoid
problems later on. If you are experiencing
problems with paying PAYE or any other tax
on time, HMRC may be prepared to defer
payment and this, in turn, may avoid
penalties.
Please get in touch if you would like
to discuss this further.
Link:
HMRC guidance |
