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New interest charges for late payment of PAYE and NIC
New interest charges are to be introduced from 6 April 2010 for in-year payments of PAYE and NIC not paid on time and in full.
These affect all employers and contractors, in respect of payments of PAYE, NIC, Student loan deductions, and CIS deductions due for payment from this date. Class 1A NIC payments are also affected from July 2011. Penalties will be charged for payments due on a monthly or quarterly basis, if these are not paid by the due date and in full.
The penalty will increase each time a payment is made late, and is based on the amount that was paid late – minimum of 1%, rising to a maximum of 4%.Additional penalties will be incurred for any payments made more than 6 months late or more than 12 months late, of 5% each time. No penalty will be charged if only one payment is made late in a tax year as long as it is not made more than 6 months late.
Payments must be received on or before 19 of the month if this is a working day, or on the last working day before this date, if it falls at the weekend or on a bank holiday to avoid paying late.
You may wish to consider making your payments electronically if you do not already pay this way. Your payment must have cleared by 22nd of the month if this is a working day or by the last working day before this date if it falls on a weekend or bank holiday.
We will continue to advise you of the amounts due for payment and the due date where we process your payroll. We will no longer offer to forward your payment of PAYE and NIC to H M Revenue & Customs.
If no payment is due for a month, it is important that a nil payslip is submitted. There is also a facility on the Revenue website to notify a nil payment electronically.
Penalty notifications will not be issued until after the end of the tax year, when the rate of penalty can be determined.
For further information or assistance please contact Judith Skilbeck or your client contact at Rowley’s on 0116 2827000.