CH152950 - Penalties for Failure to Pay on Time: Rules for specific taxes: Pay As You Earn (PAYE) and National Insurance Contributions (NIC): Penalties: annual payment obligations - example
Example of obligation to pay Class 1A National Insurance Contributions, initial and further penalties after year end
Ali Ltd is due to pay Class 1A NICs of £2,000 to us on 19 July 2012, but fails to do so. The company makes some payments at later dates, as shown in the table below.
The due date is 19 July 2012. The penalty date is 19 August 2012. The penalties are as follows.
| Payment | Unpaid Class 1A | Penalty | |
|---|---|---|---|
| Amount due at 19 July 2012 | £2,000 | ||
| Initial 5% penalty on £2,000 at 19 August 2012 | £100 | ||
| Payment 1 September 2012 | £500 | £1,500 | |
| 5 month further 5% penalty on £1,500 at 19 January 2013 | £75 | ||
| Payment 3 March 2013 | £500 | £1,000 | |
| 11 month further 5% penalty on £1,000 at 19 July 2013 | £50 | ||
| Total penalty | £225 |