Late payment penalties—PAYE, NICs and construction industry scheme
Produced in partnership with Philip Rutherford
Late payment penalties—PAYE, NICs and construction industry scheme

The following Tax practice note produced in partnership with Philip Rutherford provides comprehensive and up to date legal information covering:

  • Late payment penalties—PAYE, NICs and construction industry scheme
  • Commencement and the impact of real time information
  • Operation of the penalty for monthly and quarterly payments
  • Calculating the penalty—rules from April 2015
  • Example 1—illustrating the multiple penalties where monthly payments are made late from April 2015
  • Calculating the penalty—rules until April 2015
  • Example 2—illustrating the multiple penalties where monthly payments are made late prior to April 2015
  • Notification of the penalty
  • Penalties for late payment of Class 1A and Class 1B NICs

This Practice Note is about the penalty regime in the Finance Act 2009 (FA 2009) for the late payment of:

  1. income tax and Class 1 NICs via pay as you earn (PAYE)

  2. student loan deductions

  3. income tax due under the construction industry scheme (CIS), and

  4. Class 1A and Class 1B NICs

Late paid tax will also incur interest, see Practice Note: Interest on late paid tax.

The calculation of late payment penalties depends on whether the tax is payable:

  1. monthly or quarterly (this will normally be the case for income tax and Class 1 NICs under PAYE, student loan deductions and CIS payments), or

  2. annually (Class 1A and Class 1B NICs)

Late payment penalties for income tax that is self assessed (as opposed to being paid through the PAYE system) are covered in Practice Note: Late payment penalties—income tax, capital gains tax and corporation tax.

In addition to late payment penalties, there are penalties for the late filing of returns (also known as late reporting). For more information on:

  1. penalties for late and inaccurate PAYE reporting, for which, see Practice Note: PAYE compliance and RTI—Penalties and interest and the HMRC website, and

  2. penalties for late filing and inaccuracies under CIS, for which, see Practice Note: Construction industry scheme penalties

Commencement and the impact of real time information

The rules outlined in this Practice Note are in FA 2009, Sch 56.

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