I have received late payment penalty notices from HM Revenue & Customs for late payment of PAYE for the last 2 months? I usually pay by cheque each month and the cheques were posted on or before the 19th following the month end. Why have I got a penalty and how much will I pay?
PAYE payments paid by cheque must reach HM Revenue and Customs accounts office no later than the 19th following the month end. If you were making payments electronically, cleared funds should reach HM Revenue & Customs by the 22nd following the month end.
You should always leave plenty of time for the payments to reach HM Revenue & Customs bank account, even if paying electronically in order to avoid the possibility of late payment penalties, which can range from 1% to 4% of the monthly liability due (the 1st late payment in the year is ignored).
When making payments, you should also include the correct payment reference to ensure it is allocated to the correct month and year. If you are paying more than 14 days early or 14 days late you will need to add 4 digits to the end of your 13 digit accounts office reference. For e.g. the month ended 5th August 2017, is the 4th month of 2017/18 and would be, “1804”.
If no payment is due for any month, submit a Nil Employer Payment Summary on or before the 19th following the month end.
You should check the dates when your last two monthly cheque payments for PAYE were posted to HM Revenue & Customs and the date the funds cleared your bank account to determine if you agree with the penalty notices. If you do not agree with the penalty notices issued then you have 30 days to submit an appeal.
The advice in this column is specific to the facts surrounding the questions posed. Neither PKF-FPM nor the contributors accept any liability for any direct or indirect loss arising from any reliance placed on replies.