PAYE Penalties

From May 2010 HM Revenue & Customs has started to impose new penalties for late payment of PAYE. This includes PAYE tax, National Insurance, Student Loan deductions and CIS deductions. These penalties will apply whether you pay monthly or quarterly.

PAYE Penalties

The following table shows how the penalties will be calculated.

No. of times payments are late in a tax year Penalty percentage Amount to which penalty percentages apply
1 No penalty
2-4 1% Total amount that is late in
5-7 2% the tax year (ignoring the first
8-10 3% late payment in that tax year).
11 or more 4%

Please note that a penalty of 5% of any amount unpaid may be charged if an amount is six months late and a further 5% if the amount is still unpaid after twelve months.

HM Revenue & Customs will not notify employers of penalties until after the end of the tax year i.e. April/May 2011 so you may not be made immediately aware of any late payments.

Remember that if you pay monthly your payment must be cleared by the 19th of the month.

Please let us know if you have any questions on the above or on methods of paying PAYE.

If you think you may have problems paying your PAYE/NI on time please contact us and we can contact HM Revenue & Customs about getting extra time to pay.

Call us on 01827 715264 or e-mail