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HMRC internal manual

Debt Management and Banking Manual

HM Revenue & Customs
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Debt and return pursuit: miscellaneous charges: Class 1A NICs - penalty determinations for late return of form P11D(b)

Class 1A NICs penalties are imposed under Regulation 81(2) Social Security (Contributions) Regulations 2001 where the employer does not provide a return by 6 July each year. R81(2) is in two parts, each imposing different penalties which may be appealed against and are due and payable 30 days after issue of the notice imposing the penalty. Penalties are imposed only on P, P(SC) and Taxed Award Scheme employers.

Penalties under R81(2)(a)

The penalties under R81(2)(a) are imposed automatically using the Employer Compliance System (ECS). Penalties are imposed for the number of months the failure to provide a return continues, up to a maximum of 12 months.

Penalties are charged at £100 per month or part-month for every 50 employees. The R81(2)(a) penalties cannot exceed the amount of Class 1A contributions due for the year and where the amount of the penalty is less than £100, as a result of this cap, it will not be charged.

“Interim” penalties where the return is outstanding will be issued in bulk at 4-monthly intervals, in November, March and July each year. “Final“ penalties, where the return has been submitted, will be issued on a daily basis as returns are received and captured.

Penalties under R81(2)(b)

Penalties under R81(2)(b) are imposed after the failure has exceeded 12 months from the due date.

Recovery action

SAFE will make initial applications for payment. If unpaid, the charge will be passed automatically to IDMS and follow the existing IDMS rules to decide the next action and as appropriate the enforcement path.


The work item will appear on the C/W MISC Worklist and is distinguished from EOY penalties by the letter ‘B’ in the interest indicator field.

Class 1A NICs penalties are recoverable as if they were Class 1A contributions due from the employer. You may therefore take any of the normal methods of enforcement proceedings to recover Class 1A NICs penalties. If you take proceedings for both tax and NIC Class 1A penalties in the same action, show them separately as ‘tax’ and ‘Class 1A NICs’ penalties.


Show the amount on form C204 in the row titled ‘Penalties’

County court proceedings (England and Wales)

Describe the debt as penalties in the particulars of claim.

Summary proceedings (not Scotland)

Describe the debt as a ‘penalty.’

Summary proceedings (Scotland)

Describe the debt as ‘Penalty determined under Regulation 81(2) Social Security (Contributions) Regulations 2001.

Summary warrant

Describe the debt as ‘Penalty determined under Regulation 81(2) Social Security (Contributions) Regulations 2001’.

Ordinary cause

Where you need to include Class 1A NIC penalties in any action you should contact Solicitor’s Office Edinburgh to confirm the style to be used.

Certificate of debt

If you need a certificate of debt contact the Enforcement Technical Team (Debt Management Bradford) or in Scotland, Debt Management Group, Edinburgh.


Interest is not chargeable on Class 1A NICs penalties paid late.