Find information on how interest is charged on PAYE and Construction Industry Scheme (CIS) payments made late if you're an employer.
When interest is charged
HMRC charges interest on any late PAYE and Construction Industry Scheme (CIS) payments. This is to compensate the Exchequer for late payment and to provide a measure of fairness to those taxpayers who pay what is due on time.
HMRC will charge interest on all unpaid:
- PAYE tax, Class 1 National Insurance contributions (NICs) and student loan deductions including specified charges
- CIS charges
- in-year late filing penalties, which start from October 2014
- in-year late payment penalties, which will be charged automatically from April 2015
- any amount payable for month 12 tax year 2013 to 2014 which is still outstanding after 19/22 April 2014
- underpayments that arise because of an adjustment reported on an Earlier Year Update (EYU) or Full Payment Submission (FPS) submitted in respect of tax year 2014 to 2015 onwards
- annual payments such as Class 1A and Class 1B NICs which remain unpaid after the due date
How much you pay
HMRC will charge interest daily, from the date a payment is due and payable to the date it is paid in full. Current interest rates are set out at HMRC interest rates.
|Charge||Interest is charged from|
|PAYE tax, Class 1 NICs, student loan deductions and CIS payments||day 19 of relevant month/quarter for all cheque payments, day 22 of relevant month/quarter for all electronic payments|
|EYU or FPS||19 April for all cheque payments, 22 April for all electronic payments|
|Tax year 2013 to 2014 month 12 underpayments||19 April for all cheque payments, 22 April for all electronic payments|
|Penalties||Relevant due date of the penalty charge|
|Class 1A NICs charges||19 July for all cheque payments, 22 July for all electronic payments|
|Class 1B NICs charges||19 October for all cheque payments, 22 October for all electronic payments|
Accrued interest is only a guide to what may be due. Interest is charged when the amount due is settled. Interest is shown as accruing from day 19 of each month, regardless of how the employer pays. Employers who pay electronically will see an accrued interest entry between day 19 and day 22 of a month. Once the electronic payment is received, the calculation will correctly use day 22 as the due date, and any interest charge generated between day 19 and day 22 will be cancelled.
HMRC will apply repayment interest where you make a payment and the charge is then reduced resulting in an overpayment which is either reallocated to a later charge or repaid.
Find out what is due
Your online PAYE account will be updated regularly to show the amount of any charged or repayment interest that is building up or due as follows:
- late payment interest (due or paid) will appear at the bottom of the month in which the interest charge was made
- accruing late payment interest will appear at the bottom of the current tax month - accrued interest is only a guide to what may be due
- repayment interest to be paid will appear at the bottom of the current tax month
- repayment interest already paid will appear at the bottom of the tax month in which it was repaid
- for more detail, you can select a link from these items to a breakdown showing more detail about it
You cannot appeal against an interest charge. If you don not agree with the amount charged, write to the issuing office explaining why.