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Income tax – deadlines and penalties

As an employer you are responsible for deducting the correct amount of income tax from the payments made to your employees. 

What is the deadline for submitting information about income tax deductions?

Each time you pay employees or their circumstances change you need to submit the PAYE (Pay as You Earn) information to HM Revenue and Customs. 

The deadlines for submitting information is:

Staff Circumstance Deadline
Starters On or before the employee’s first day
Pay employees On or before the day every time an employee is paid, whether this is weekly, monthly or any normal payroll date. Therefore for weekly paid employees there will be 52 submissions and for monthly paid employees there will be 12 submissions. 
Leavers On or before the employee’s last day day.
Employer payment summary (EPS) By the 19th the following month. 

 

The information is submitted on a Full Payment Submission (FPS). More on this and deadlines for submissions can be read here.

 

What is the deadline for paying income tax deductions over to HMRC?

The amount that must be paid to HMRC is:

  • The income tax and national insurance reported in your FPS in the previous tax month
  • Less any reductions from your EPS which have been reported before the 19th of the current month.

Greater than £1,500

If the amount payable is greater than £1,500 per month, the amount is due by the 22nd of the month if paid electronically (19th if paid by post).

For example an FPS was submitted on 31st May and an EPS on the 18th June, the amount is due by 22nd June if paid electronically.

Less than £1,500 

If the amount payable is less than £1,500 per month, the amount is due by the 22nd of the quarter if paid electronically (19th if paid by post) however, if you wish the payments can be made monthly (this may aid cashflow).

  • 5th July – amount due by 22nd July
  • 5th October – amount due by 22nd October
  • 5th January – amount due by 22nd January
  • 5th April – amount due by 22nd April.

What penalties may I incur if I file late?

You may be charged a penalty if:

  • your Full Payment Submission was late, or
  • you did not send in the expected number of Full Payment Submissions, or
  • you failed to send an Employer Payment Summary when no employees were paid.

However, there will be no charge for your first failure in a tax year to send a report on time.

The amount of the penalty will depend on the number of employees you have:

Number of employees Monthly penalty
1-9 £100
10-49 £200
50-249 £300
£250 or more £400

 

If the report is more than 3 months late, an additional penalty of 5% of the income tax and national insurance you should have reported may be charged.

What penalties may I incur if I pay late?

You may be charged a penalty if your payment to HMRC is late.

The amount of the penalty will depend on the number of defaults in a tax year (excluding the first default):

Number of defaults Penalty
1-3 1% of the late amount
4-6 2% of the late amount
7-9 3% of the late amount
10 or more 4% of the late amount

 

If any amount remains outstanding after six months an additional 5% of the unpaid amounts could be charged and a further 5% after 12 months.

What penalties may I incur if my return is wrong?

If HMRC discovers careless or deliberate errors, the penalties that could be charged depend on the type of behaviour and whether you were prompted by HMRC to disclose it:

Type of behaviour Unprompted disclosure Prompted disclosure
Reasonable care No penalty No penalty
Careless 0% to 30% 15% to 30%
Deliberate 20% to 70% 35% to 70%
Deliberate and concealed 30% to 100% 50% to 100%

How can I appeal against a penalty?

If you get a penalty you will be sent a notice which will tell you how and what to pay.

Failure to pay a penalty within 30 days will result in interest being charged.

An appeal against a penalty can be made online or via the post, you can appeal if:

  1. you think the penalty is not due, or
  2. you think the amount of the penalty is incorrect, or
  3. you had a reasonable excuse, the HMRC website gives guidance on what is classed as a reasonable excuse.
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