Factsheet - Penalties for Late Payment of PAYE

Updated: 03 June 2010

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For return periods starting on or after 6 April 2010, HMRC may charge penalties where PAYE is not paid in full and in time.

Under the new penalty regime, the penalty charged depends on the number of times PAYE was paid late during the tax year. However, a penalty is not charged if only one PAYE payment is made later during the tax year (provided that payment was not made more than six months late). The penalty rates range from 1% to 4% of the tax paid late, depending on the number of late payments made during the year. Additional penalties are charged for amounts that remain unpaid six months and 12 months after the due date.

A PAYE month end runs to the fifth of the month. Where payment is made other than electronically (e.g. by cheque) payment must reach the Accounts Office by the 19th of the month. Where payment is made electronically, cleared funds must reach HMRC’s bank account by 22nd of the month.

Payment must be made in full and on time each month if late payment penalties are to be avoided.

Penalties are levied after the end of the tax year to which they relate. A right of appeal exists against a penalty notice.

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