DMBM523590 - Debt and return pursuit: PAYE: considering a case for penalties

The majority of this manual will be archived on 1 July 2024. If there is content within this manual you use regularly, email hmrcmanualsteam@hmrc.gov.uk to let us know.

Use the PAYE LLP ready reckoner (PDF 24kb) to calculate possible penalty amounts; this can be used as a guide to consider whether a case is suitable for penalties.

Also KAI will show their estimate of the penalty on the spreadsheet produced by them used to highlight possible penalty cases (note: this does not include 6 month and 12 month penalties).

Initial actions to take

Review the employer’s BROCS or SAFE record as appropriate to identify:

  • whether the case is not suitable for penalties (for example, does employer have a special arrangement; in other words, a modified scheme)
  • if a TTP arrangement has been agreed:
  • for what periods
  • whether it has been cancelled (you may also need to look at IDMS for TTP arrangements)
  • if a return has been received and if there is any net overpayment or underpayment.

Note BROCS that the case has been reviewed for penalties as follows:

  • where case reviewed and excluded: “PLPP EXCL xxxx” (xxxx= reason for exclusion
  • where case reviewed and penalty raised: ‘PLPP Pen £[amount] raised/ Pen notice/ FPIP1/Pslp iss’.

For suitable cases refer to ‘Late Payment Penalty User Guide’ for step by step instructions on calculating and raising the penalty.

Time to pay

Because there is no signal in BROCS to identify TTP arrangements you will need to review both BROCS and IDMS to see if a TTP arrangement was agreed.

When staff discuss and set up in-year TTP arrangements they warn the employer that:

  • unless they have already done so, they may receive a late payment penalty warning letter for a period included in the TTP arrangement but there is no need to contact us providing they pay as agreed
  • the period(s) included in the arrangement that were not overdue at the time, will not be considered for penalties. But if they fail to maintain the arrangement or make late payments for periods outside the arrangement, penalties may be considered.

Full details of the arrangement including: date agreed; months included; payment terms and a note if cancelled, should be on both:

  • BROCS - Action history screen (BROCS function NA CNA)
  • IDMS - Notes / Assets tab.

This will help you to identify any periods penalties should not apply to.