Missed the PAYE payment deadline? Don’t panic.
Penalties for missing or late PAYE payments can be harsh, but you are off the hook if this is your first offence.
Payments of PAYE must be received by HMRC by the 19th, following the tax month/quarter in question or the 22nd, if paying electronically. This means that quarterly payers should have made payment to HMRC for the quarter ended 5 October 2018 by 22 October at the very latest.
If you missed the deadline, then you may be worried, but tax deadlines are easily missed and HMRC understand that.
If you are able to, you should make payment as soon as possible, using the correct reference so that HMRC allocate the payment correctly. You can find more information about paying HMRC on our website. While interest may be charged on your late payment (the interest rate is 3.25% per annum from 21 August 2018), if this is the first time this tax year that you have made a late payment, you will not be given a penalty.
You should then do everything you can to pay on time in future, because if you ‘default’ on two payments in a tax year (in other words, you miss the payment deadline again), you will be fined 1% of the total of those defaults. If you miss four payments in a tax year, the penalty is 2% of the total of those defaults, 7 is then 3% and so on. You can find more information of the penalty regime on our website.
You should also be aware that if any amount of PAYE is more than six months late, a penalty of 5% of the amount outstanding will be levied and another 5%, if the PAYE is still outstanding after 12 months. These penalties apply to the first late payment of tax even though the first late payment does not count for the default penalties explained above.
Late payment penalties must be paid within 30 days of the date the notice assessing the penalty is issued, or interest will be charged. The decision to issue a penalty or the amount of the penalty payable can be appealed against. More information on this is available on our website.
Our website also contains more information on the help and support that HMRC can offer you if you are having money problems and are unable to pay HMRC either on time or at all. Contacting them as early as possible may mean that you avoid penalties.
You may also be interested to know that since publishing our article on HMRC’s Needs Enhanced Support team, they have now expanded their service to deal with certain vulnerable employers and any issues they may be having in operating PAYE. It is therefore likely that if you phone HMRC and explain your circumstances, that you will be passed to this specialist team to be dealt with.