New PAYE penalties
June 21st, 2010
The taxman now has the power to charge penalties for late payment of PAYE (tax and NI). The first late payment will escape the penalty but the 2nd to 4th late payments can attract a penalty of 1% of the amount due. For the 5th to 7th late payment, the rate is 2%, 8th to 10th, it is 3% and for the 11th and 12th late payment in a year, the rate is 4%.
Any payment which remains overdue for 6 months can attract a further 5% penalty and yet a further 5% if overdue after 12 months.
So, if you think you won’t be able to pay your PAYE on time, contact HMRC before the due date and you may be able to come to an agreement for late payment and avoid any penalty - providing you stick to the terms of the payment agreement.
Also, if you don’t have any PAYE in a particular month, don’t forget to complete the payment slip with ‘Nil Due’ so that the taxman knows that you haven’t just forgotten to pay him.
The content of this article is for general information only. It should not be relied on and action which could affect your business or personal circumstances should not be taken without appropriate professional advice.
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