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HMRC internal manual

PAYE Manual

Employer returns: employer starter and leaver forms: employer e-file in-year penalties: responsibilities for handling in-year penalties

This subject is presented as follows


The division of work for raising and collecting penalties is split between

  • The Processing Office
  • The Network Units (SAFE) at Banking Operations


  • The Debt Management Office

The Processing Office

The Processing Office is responsible for

  • Raising a penalty determination through the Exceptions list in each appropriate case following receipt of a paper starter or leaver form that should have been sent online. For more information about fixed penalties see subject ‘In-year penalty cycle’ PAYE50935 
  • Notifying charges to the appropriate Banking Operations Network Unit (SAFE)

Banking Operations Network Unit (SAFE)

Banking Operations Network Unit is responsible for

  • Keeping records of each employer where a penalty charge is raised
  • Noting a penalty as ‘Local Action’ (LA) and referring it to the Debt Management Office where a penalty determination is not paid or appealed against within the 30 day appeal period

The Debt Management Office

The Debt Management Office is responsible for

  • Pursuing the collection of outstanding penalties referred by Banking Operations Network Unit
  • Contacting the employer or contractor to obtain payments on receipt of a Local Action Notice (LAN) from Banking Operations Network Unit