Income tax – deadlines and penalties

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:

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

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 19^th 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 22^nd of the month if paid electronically (19^th if paid by post).

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

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:

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.

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):

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.

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:

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.