New PAYE/CIS Penalty Regime: HMRC Guidance

In advance of new powers effective from 6 April 2010, HMRC have published a factsheet concerning penalties to be charged upon late payments of PAYE/CIS deductions.

The factsheet confirms that a single late payment paid within 6 months of the due date will not be penalised, but repeated lateness will begin with a penalty range of between 1% and 4% of the unpaid amount, increasing to 5% for payments later than 6 months, with a further 5% after 12 months.

The factsheet can be accessed below:

http://www.hmrc.gov.uk/paye/factsheets/fpl_1.pdf

This may come as a culture shock to employers used to not being penalised for late PAYE remittances. There are of course already implications for CIS businesses. Practitioners are therefore encouraged to advise their clients  of the new penalties and how the Business Payment Support Service may assist, as early as possible.