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HMRC internal manual

Debt Management and Banking Manual

HM Revenue & Customs
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Time To Pay: agreeing or rejecting Time To Pay: PAYE penalties

Starting on the 6th April 2010, employers not paying PAYE in full or on time for tax years 2010-11 onwards may be charged late payment penalties. Penalties will not be raised during tax year 2010-11 but instead will be calculated and issued retrospectively in the following tax year.

Penalties and TTP

Schedule 56 paragraph 10 of the finance act 2009 allows HMRC to suspend penalties for where the following conditions are met

  • HMRC agree to a Time to Pay (TTP) arrangement
  • The customer approaches us before the date that they become liable for the penalty
  • The customer adhere to the terms of the TTP arrangement.

In year TTP arrangements

BROCS can not recognise when a TTP arrangement has been agreed with a customer and even in cases where the customer has approached us before the date they become liable for a penalty and we agree a TTP they may still receive a PAYE late payment penalty warning letter. The warning letter is issued as even though we have agreed a TTP arrangement the customer may still be liable for a penalty if they don’t keep to the terms of the agreement.

When speaking to customers and agreeing TTP with them you should make them aware

  • that they may still receive a late payment penalty warning letter
  • providing they adhere to the terms of the arrangement, the month included in the arrangement will not be considered for penalties
  • if they do not adhere to the terms of the arrangement these months may be considered for penalties.

Noting TTP

When TTP is agreed for a PAYE debt you should make a note which includes

  • the date that the customer requested TTP
  • the PAYE months included in the arrangement
  • the agreed payment amounts and dates

this note should be included on both

  • BROCS - Action history screen function NA CNA, and

IDMS - Notes/Assets tab