Starting 19th May, 2010, HM Revenue and Customs have introduced a penalty for late payment of monthly PAYE liabilities including Tax, National Insurance contributions, Construction Industry Scheme deductions and Student loan deductions.
The new late payment penalties will apply to all employers. There is some respite to small employers since they pay quarterly.
The penalties will be a percentage of the amount paid late and start at 1% and increase to 4%, depending on the number of late payments in the tax year. There are also penalties of 5% if any of the PAYE due is still not paid after 6 months and again after 12 months.
There are heavy penalties for late payment of Class 1A National Insurance (from P11D returns) with a 5% penalty if paid 30 days late then a further 5% if 6 months overdue and a further 5% if 12 months overdue
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