PAYE Penalties

Penalties for late payment of taxes and deductions collected through PAYE system are levied:

  • The amount of penalty will depend on the number of defaults in any 12 month period. The first time tax payer defaults, they will not receive a penalty.
  • A second late payment and subsequent failures in default period will attract a penalty of 2% of the tax unpaid rising up to 5% of unpaid tax.
  • Further penalties of 5% of any amounts of tax still unpaid at 6 and 12 months.
  • Late payment penalties will not be charged during an agreed time to pay arrangement with HMRC unless the tax payer defaults or mis-uses the arrangement.