Late paid PAYE

You will not be charged a penalty if only one PAYE amount is late in a tax year - unless that payment is over 6 months late.

Thereafter, the amount of the penalty will depend on how much is late and how many times your payments are late in a tax year. The table below shows how the penalties are calculated:

Number of defaults in a tax year	Penalty percentage	Amount to which penalty percentages apply
1-3	1%	The total amount that is late in the relevant tax month (ignoring the first late payment in the tax year)
4-6	2%
7-9	3%
10 or more	4%

 

HMRC will only send one warning letter; the first time in the tax year they think your PAYE payment is late. Although you may receive an online generic notification notice every time they think you are making payments late. These letters are issued about two weeks after the payment due dates.

In-year interest will also apply on all amounts unpaid from the relevant due date to the date of payment.

If you agree that you have made a late payment, you should make sure you pay on time and in full in future. Late payment penalties are charged on an escalating scale, so making payments in full and on time will reduce the amount of any potential penalty.

If you experiencing difficulties in keeping on top of your responsibilities as an employer, please feel free to contact your local TaxAssist Accountant who would be happy to manage the payroll on your behalf.

Date published 30 May 2014

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.