6 April 2010 saw HMRC introduce their new PAYE penalties regime, aimed at employers who fail to settle, in full, their PAYE commitments on a timely basis.
The new rules provide that where an employer first pays late, or underpays, although there is no penalty, it does start a penalty period lasting 12 months. Any further late payments during that time will attract penalties ranging from 1% to 4% of the amount due depending upon the number of occurrences. Any single amount outstanding for more than 5 months is subject to additional penalties starting at 5%.
To avoid a penalty position, a postal payment must be with HMRC by the 19th of each month (or each quarter, if quarterly returns are submitted). Electronic payments must be cleared into HMRC’s bank account by the 22nd.
There appears to be very little flexibility in HMRC’s tariff based regime and the first payment for 2010/11 month 1 is due on 19 May 2010 (the first quarter is due on 19 July 2010).
The only cases where the penalty will not be imposed appears to be when:
- a “Time to Pay Arrangement” has been entered into (and only when that was agreed before payment became due); or
- a “reasonable excuse” is provided which supports why the payment was made late. This would normally have to be a fairly dramatic event to be upheld.
If we can be of any assistance or should you require further details regarding PAYE penalties please contact us. As you are probably aware, Banks Sheridan’s payroll bureau service is available to support you in meeting these commitments.
