DMBM523530 - Debt and return pursuit: PAYE: penalties for late payment: PAYE charges liable or not liable to penalties for late payment

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BROCS charges

Late-payment penalties can apply to:

  • monthly, quarterly and annual PAYE payments incorporating Tax, NICs, Student Loans and Construction Industry Scheme (CIS) deductions, net of any statutory payments. This includes charities unless they can prove they have an agreement
  • Class 1A NIC.

These do not apply to:

  • periods covered by Time To Pay agreements applied for before the amounts became due and payable
  • employers who have special arrangements (modified schemes) with HMRC (see 'Modified PAYE schemes' below)
  • NIC holiday payments.

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SAFE charges

Late-payment penalties can apply to:

  • PAYE Regulation 80 determinations
  • Student Loan Regulation 45 determinations
  • CIS Regulation 13 determinations
  • PAYE Regulation 110 determinations
  • PAYE Settlement agreements
  • Section 8 decisions - NIC only

These do not apply to:

  • Class 6 settlements; these are contract settlements and are outside PAYE Regulations
  • periods covered by time to pay agreements applied for before the amounts became due and payable.

Modified PAYE schemes

  • Tax Equalisation Cases (Appendix 6 - EPAPP6).
  • Modified Class 1 and Class 1A NICs) (Appendix 7a - EPAPP7a).
  • Modified Class 1 NICs (Appendix 7b - EPAPP7b).
  • IR35 employers.

Most of these schemes can be easily identified on BROCS and IDMS as they will show either APP6, APP7a or APP7b in the employer name. If the scheme is noted as modified but with no Appendix number you should fully review the case (for example, if an LBU case contact the Customer Compliance Manager (CCM) to discuss) to establish whether or not it is suitable for a penalty.

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If these employers do not keep to the terms of their special arrangement, their modified PAYE scheme can be cancelled and a new non-modified PAYE scheme opened. Late payment penalties may then be charged on late payments made under the non-modified scheme.