Information for employers about late/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 didn’t send the expected number of FPSs
- you didn’t send an Employer Payment Summary (EPS) when you didn’t pay any employees in a tax month
HM Revenue and Customs (HMRC) won’t 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 2018) 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 doesn’t apply to employers who register with HMRC as an annual scheme)
How much you pay
How much you’re charged 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.
Estimating what you owe
If you don’t submit your FPS on time or tell HMRC by sending an EPS that you haven’t paid any employees, they may raise a specified charge - an estimate of how much HMRC thinks you should pay. This is based on your previous PAYE payment and filing history. You will be able to see any specified charge by viewing your PAYE account online.
A specified charge doesn’t replace the need for you to send your FPS or EPS. Only the submission of the missing FPS or EPS for each month will replace the charge(s) with the amount that is due for each month and support any appeal you have made against a late filing penalty.
If you send in updated year-to-date figures in your next FPS instead, the specified charges will remain in place, but your accounting record will be adjusted to reflect the year to date figures supplied in the later month.
If you get a penalty
HMRC sends penalty notices quarterly. A notice will include what you owe, how to pay and what to do if you don’t 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
These are some of the reasons you can give as grounds for appeal:
- 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 doesn’t 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 at all and penalties for errors due to failure to take reasonable care can be reduced to zero with full and unprompted disclosure to HMRC.
See HMRC’s factsheet Penalties for inaccuracies in returns and documents for more information.
Published: 26 August 2014
Updated: 7 September 2017
- The section 'When penalties are charged' has been updated to show that the Full Payment Submission 3 day easement has been extended to 5 April 2018.
- The sections 'If you get a penalty' and 'Estimating what you owe' have been updated.
- The temporary relaxation reason code E was removed from 6 April 2016.
- HMRC's electronic appeals system has been updated to allow employers to appeal against a specific penalty raised for 2014-15.
- From 27 April 2015 the address to send written appeals to has changed.
- First published.
From: HM Revenue & Customs
Part of: PAYE