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New PAYE/NI tax year: New penalty regime for late payment

New rules concerning the late payment of PAYE and NI are to be introduced in the new tax year starting on 6th April 2010. Penalties will be charged on amounts due where cleared funds are not received by the 22nd of the month following the end of the month or quarter to which they relate. Payments can only be remitted on a quarterly basis if it is estimated that the sum due for the quarter will be no more than £4500. If payment is made by post rather than electronically funds must be received no later than the 19th of the relevant month.

The amount of the penalty is dependent upon how late the payment is and the number of previous breaches of the regulations. The introduction of the new penalty regime will make it all the more important to ensure payments are made on time.

Where businesses are unable to pay their debts by the relevant dates it is important to speak to HMRC’s Business Payment Support Service (BPSS) before the deadline for payment. Time to pay agreements can be negotiated with HMRC provided they can be convinced there is a viable business. For larger amounts and extended repayments professional support is likely to assist your case.

Whilst the charging of penalties on payments received late during the course of a tax year is new, interest has been charged for some time where the final payment for a tax year is not paid on time. For the tax year finishing on 5th April 2010, to avoid interest being charged any tax due must be paid no later than 19th May 2010. Penalties are also charged where employers end of tax year returns are not submitted by that date. Once again an early dialogue with the BPSS is important to maximise your chance of an acceptable outcome.



Date: 25th March, 2010
Author: Peter Godfrey-Evans


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