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HMRC internal manual

Debt Management and Banking Manual

Debt and return pursuit: PAYE: penalties for late payment: payments and late payments

All employers

Whether a payment is late or not depends on the:

  • payment due date
  • date HMRC received cleared funds
  • method of payment (electronic or non-electronic).

The method of payment is only taken into account where the late paid amount is an in-year period, a Class 1A NIC charge, or a PSA agreement because the due date is extended for electronic payers from 19th to 22nd.

For any other PAYE charges (for example Reg 80 determination) the method of payment has no relevance because legislation does not allow us to extend the due date for electronic payers.

In-year PAYE only

A late posted ‘nil’ declaration should not be treated as a late payment and should not be included in the penalty calculation.

Payment due dates

For background information see DMBM520205.

An employer is late if they don’t pay by the following dates.

  • Segmentation 1 (large) employers: electronic payment not received by 22nd.
  • All other employers:
    • electronic payment not received by 22nd.
    • cheque payment not received by 19th; if the 19th is a weekend or a Bank Holiday the cheque still has to be received by the 19th for it to be on time.

BROCS EDPs (effective date of payment)

BROCS determines if a payment was on time according to whether a payment has an EDP of the 19th or earlier, irrespective of payment method.

Electronic payments

Because electronic payments are due on the 22nd, compared to the 19th for non-electronic payments, BROCS deducts 3 calendar days from an electronic payment’s EDP. So for electronic payments, the actual date HMRC received cleared funds is the EDP shown on BROCS plus 3 calendar days.

Example: For an electronic payment, received on 22nd (on time), BROCS deducts 3 calendar days showing the EDP as 19th, which BROCS then treats as a payment on time. For an electronic payment received on 24th (late) BROCS deducts 3 calendar days and the EDP will be shown as 21st which is later than 19th and so is late.

When contacting employers:

  • remember to add on three calendar days to the EDP of electronic payments when discussing payment dates; DMBM520930 tells you what the electronic posting codes are.
  • do not lead employers to believe their electronic payment was received earlier than it was.

Payments noted as late (those with an EDP of 20th or later) will in most cases have a default note set against them by BROCS (see BROCS function VTP Action History). Appendix C will help you to decide if a payment was late or not.

Non-electronic payments

Cheque and cash payments have a payment date (EDP) of the date the cheque or cash was received.

Payment types - BROCS payment and transaction codes

Appendix D lists BROCS payment and other transaction codes (such as remission). It also shows you what payment types are classed as electronic, which is important as it affects:

  • the due date
  • whether payment was late
  • if penalties should apply.