Written by Paul Chappell
Published on January 21, 2010

For the first time HM Revenue and Customs are introducing monthly penalties for late payment of PAYE,NIC and CIS. The penalties are based on the number of defaults in a 12 month period. The first late payment will not incur a penalty however subsequent late payments will be penalised as follows:-

  • The second late payment will incur a 1% penalty rising to 4% depending on how many times payment is made late.
  • A penalty of 5% will be charged if a payment is made more than 6 months late with a further 5% penalty if the payment remains outstanding for 12 months
  • HMRC may charge up to 3 penalties of 5% of the amount that is late, depending on the time that the amount is not paid in full, in respect of annual payments such as Class 1A NIC and PAYE Settlement Agreements.

Where HMRC identifies an employer has made the monthly payments late from 6 April 2010 interest will also be charged automatically.