Accountancy Matters Blog - Coventry Accountants Fox Evans Warn of New PAYE Penalties
16th March 2010
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Fox Evans Chartered Accountants Coventry

Coventry Accountancy Matters Blog - PAYE Penalties


Fox Evans Accountants in Coventry advise:

New PAYE  Penalties from May 2010!






Fox Evans Accountants in Coventry are advising employers - As from May 2010, H M Revenue & Customs will be charging penalties if employers do not pay the PAYE (or CIS) due each month on time and in full.

There is a wealth of information on this available from HMRC's website but a summary of our understanding of the new rules is set out below.

• Penalties will be issued if you have more than one late payment in the tax year, and the penalty will be calculated as a percentage of the amount that was paid late, as shown in the table:

Nunber of times payment is late in the tax year Penalty Percentage

1 - No penalty
2 - 4 = 1%
5 - 7 = 2%
8 - 10 = 3%
11 or more = 4%

• If a payment is made more than six months late, an increased penalty of 5% of the late amount will be charged.

• Even if payments are just a day or two late, HMRC will charge the penalty, unless you have a reasonable excuse.

• Cheques must have arrived at HMRC Accounts Office by 19th of the month and electronic payments should be cleared in HMRC's bank account by 22nd of the month.

• If no payment is due, it is the employer's responsibility to notify HMRC using the payslip booklet.

• Payment must be made of the full amount due for each month - it is no longer acceptable to pay an estimated amount, and make up the difference the next month or at the end of the tax year.

• The new penalty regime applies to all PAYE, NI, CIS and Class 1A payments due.

• No penalty notices will be issued by HMRC until April / May 2011 - so you may have a hefty penalty built up already by then!

It is every employer’s (or contractor’s) responsibility to ensure that they pay HMRC on time to avoid being charged these penalties.

If you know you are going to have difficulties in paying then we recommend you call the Business Payment Support Service on 0845 302 1435 as soon as possible, and HMRC may allow extra time to pay.

How HMRC are going to monitor this new regime is unclear, especially as the current systems in place can barely cope with the old regime. It is most likely that persistent non payment, or a PAYE inspection, will trigger any liability. However, the only way to be certain of keeping out of the penalties regime is to pay on time, every time.

If you need additional payroll support, contact Fox Evans Accountants in Coventry and we will be happy to help.

Fox Evans Accountants - Coventry 024 7696 0710

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About the Author

Donna W

Member since: 16th June 2010

I'm a part-time accountant, working 2 days a week for Fox Evans Accountants in Coventry, where my job is mainly helping small local businesses with their bookkeeping, VAT and payroll requirements.
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