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HMRC internal manual

Debt Management and Banking Manual

From
HM Revenue & Customs
Updated
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Debt and return pursuit: PAYE: penalties for late payment: overview

Legislation introduced from 6 April 2010, and for tax years 2010-11 and onwards, employers not paying PAYE in full or on time can be charged penalties. PAYE includes Tax, NICs, Student Loans and Construction Industry Scheme (CIS) deductions. The penalties are raised in addition to statutory interest which is currently charged on payments made after the end of the tax year.

The penalty regime covers three penalties for PAYE.

  • Late-payment penalty - applies to any in year late paid periods (after the first late paid period) in a tax year. It increases with every default. For annual charges (e.g. Reg 80 etc) the penalty is charged if payment is not made by the later of 30 days after either the payment due date or the date the assessment / determination is made.
  • Six-month penalty - applies to any period in a tax year, or any annual charge, unpaid after six months.
  • Twelve-month penalty - applies to any period in a tax year, or any annual charge, unpaid after twelve months.