From 5 May 2010, the end of the first month in the 2010/2011 tax year, all employers and contractors will be subject to a penalty regime for late payments. Penalties will be charged for late monthly, quarterly or annual payments of:
- tax
- National Insurance Contributions
- Construction Industry Scheme deductions
- Student Loan deductions.
In year payments and the Class 1A National Insurance payment relating to P11D benefits will need to be made on time and in full. HM Revenue & Customs (HMRC) have confirmed though that one late payment in the tax year will not result in a penalty as long as it is not more than six months late.
Penalties will be worked out on a proportion basis of the amount that is late. The later the payment the bigger the percentage will be. Please click here for information on the penalties.
Payments can be made in various ways and more information can be found on the HMRC website.
HMRC are issuing PAYE/CIS ‘Paying electronically’ letters in lieu of the yellow Employer Payslip Booklet, for 2010/2011, to encourage more electronic payments. The letter provides the necessary details to pay electronically instead of paying by post with a payslip. However, HMRC have confirmed that you or your accountant can write to the relevant tax office to receive the yellow Employer Payslip Booklet if electronic payments cannot be made. Only large employers, employing over 250 employees, must pay electronically so it is more of a convenience for smaller employers.
Paying electronically provides additional time to make payment. Due dates for payments can be found on the HMRC website.
If no amounts are due for a particular month or quarter a nil payslip should be sent on time, either by post or by using HMRC’s website, to avoid any unnecessary penalties. To do this online you will need your accounts office reference number. To send by post you will need the yellow Employers Payslip Booklet.
If you have any questions or would like to find out more please either contact us or review the penalties information on the HMRC website.
