| HMRC have been warning
employers for some time that they may have
to pay a penalty if they do not pay their
PAYE deductions on time. They have now
issued more detailed guidance on the way
in which the penalties will work. The
penalties will apply to PAYE deductions
due for a period starting on or after 6
April 2010 include PAYE, Student Loan
deductions, Construction Industry Scheme
payments, Class 1 NICs, annual payments of
employers' Class 1A NICs and annual PAYE
Settlement Agreements payments.
Deductions of PAYE, NICs, Student Loan
deductions and Construction Industry
Scheme payments are generally due by 19 of
each month (or 22 if paid by electronic
means and cleared into HMRC’s bank
account). Small employers are able to pay
quarterly.
HMRC are advising employers to let HMRC
know if they are likely to have difficulty
making a payment on time, so that
arrangements can be made and penalties can
be avoided. Their guidance states that
where employers enter into ‘time to pay’
arrangements, before the liability becomes
due, no penalty will be charged.
Penalties for late payment start at 1%
increasing to 4% depending on the number
of late payments in the year. Extra
penalties will be added where liabilities
are outstanding for a further six and then
12 months.
Internet link:
HMRC guidance on late payment |
