Information for employers about late or non-filing PAYE penalties, specified charges, inaccurate reports and how to avoid penalties in future.
When penalties are charged
You can get a penalty if:
- your Full Payment Submission (FPS) was late
- you did not send the expected number of FPSs
- you did not send an Employer Payment Summary (EPS) when you did not pay any employees in a tax month
HMRC will not charge a penalty if:
- your FPS is late but all reported payments on the FPS are within 3 days of your employees’ payday (this applies from 6 March 2015 to 5 April 2019), however employers who persistently file after the payment date but within 3 days may be contacted or considered for a penalty
- you’re a new employer and you sent your first FPS within 30 days of paying an employee
- it’s your first failure in the tax year to send a report on time (this does not apply to employers who register with HMRC as an annual scheme)
How much you pay
What you pay depends on how many employees you have.
|Number of employees||Monthly penalty|
|1 to 9||£100|
|10 to 49||£200|
|50 to 249||£300|
|250 or more||£400|
If you’re over 3 months late you can be charged an additional penalty of 5% of the tax and National Insurance that you should have reported.
If you run more than one PAYE scheme, you can be charged penalties for each.
How we estimate what you owe
HMRC may raise a specified charge based on an estimate of how much we think you should pay if:
- you do not submit your FPS on time
- you do not tell HMRC by sending an EPS that you have not paid any employees
This is based on your previous PAYE payment and filing history. You’ll be able to see any specified charge by viewing your PAYE account online.
A specified charge does not replace the need for you to send your FPS or EPS. Only submitting the missing FPS or EPS for each month will:
- replace the charges with the amount that is due for each month
- support an appeal you make against a late filing penalty
If you send updated year-to-date figures in your next FPS instead, the specified charges will remain in place. However, your accounting record will be adjusted to reflect the year-to-date figures given in the later month.
If you get a penalty
HMRC sends penalty notices quarterly. A notice will include:
- what you owe
- how to pay
- what to do if you do not agree with HMRC’s decision to charge you
You can appeal if you think:
- the penalty is not due
- the amount of the penalty is wrong
- you had a reasonable excuse for sending your reports late
Reasons you can give for grounds of appeal are:
- data on the returns was incorrect
- filing expectation incorrect
- filed on time
- fire/flood/natural disaster
- ill health
- IT difficulty
- missed correction/easement
- no longer have any employees
- no payments to employees
- other - only use this option if your reason for appeal does not fall into any of the above categories in the online system
You can appeal online against a filing penalty using HMRC’s Online Service. In some cases, HMRC will accept and settle the appeal automatically.
There is no print function in the online appeal facility. Take a screen print of the appeal confirmation screen for your records if you want a copy.
You can also send your appeal in writing to:
National Insurance Contributions and Employers Office
HM Revenue and Customs
The notice of penalty assessment will contain a ‘Unique ID’ for each penalty shown on the notice. You must include the Unique ID to identify which penalty you wish to appeal against.
Where HMRC discovers careless or deliberate errors, the penalties that could apply will be based on the behaviour that led to the error and the amount of potential lost revenue for that return.
Errors that arise despite taking reasonable care attract no penalty. Penalties for errors due to failure to take reasonable care can be reduced to zero with full and unprompted disclosure to HMRC.
See the penalties for inaccuracies in returns and documents factsheet for more information.