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HMRC internal manual

Compliance Handbook

From
HM Revenue & Customs
Updated
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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