CH 19 - PAYE - Penalties and Interest

Question 1

What penalty percentage is charged where PAYE is paid late?

Answer 1

The amount of each penalty will depend on the number of defaults in the tax year:
* 1st, 2nd or 3rd default = penalty of 1% of tax and NICs paid late.
* 4th, 5th or 6th default = penalty of 2% of tax and NICs paid late.
* 7th, 8th or 9th default = penalty of 3% of tax and NICs paid late.
* 10th and subsequent defaults = penalty of 4% of tax and NICs paid late.

The first late payment of tax does not count as a default.

An additional 5% penalty will be charged if an amount is more than six months late
and a further 5% again is added if it is more than 12 months late.

These penalties apply to the first late payment of tax as well.

Question 2

By when late payment penalties must be paid?

Answer 2

within 30 days of the date on the notice
or interest will be charged

Question 3

What penalties can be charged for late FPS?

Answer 3

A penalty will not be charged in respect of the first month in which one or more returns are filed late.

Where a late filling penalty is charged for a month, the amount of the penalty will depend on the number of employees within the PAYE scheme;
* £100 up to 9 employees
* £200 10-49 employees
* £300 50-249 employees
* £400 250 & more employees

an additional penalty of 5% of the tax and NICs due may be charged where a return is three months late and the relevant information has not been included in a later return.

Question 4

What is late filling penalty for P11d

Answer 4

£300 per form & £60 per day for continued failure

Question 5

What are penalties for incorrect FPS?

Answer 5

penalty is based on behaviour giving rise to the inaccuracy and level of disclosure

1. Deliberate & concealed - Max 100%/ unpromp.30% / prompted 50%
2. Deliberate but unconc. - Max 70% / unprompt 20% / prompt 35%
3. $Careless - Max 30% / unpromted 0% / promted 15%

$ Penalties airising due to carelessness can be suspended for two years & even cancelled.*

Question 6

What is penalty for filling P11dfraudelently or negligently?

Answer 6

If an incorrect P11D is filed fraudulently or negligently, a penalty of up to £3,000 per form can be levied.