NEW PENALTIES FOR LATE PAYMENT OF PAYE /CIS
From May 2010, HMRC is changing the penalty regime for interest on PAYE and CIS accounts.
These new penalties will apply to the payment by employers and contractors of PAYE, Class 1 NICs, student loan deductions and CIS deductions.
Penalties will now depend on the number of times payment is made late during the tax year, and will be charged at between 1% and 4 % as follows:
| No of times payments are late in a tax year | Penalty percentage | Amount to which penalty percentages apply |
| 1 |
No penalty |
Total amount that is late in the tax year (ignoring the first late payment in that tax year). |
| 2-4 |
1% |
|
| 5-7 |
2% |
|
| 8-10 |
3% |
|
| 11 or more |
4% |
In addition a 5% penalty will be charged on amounts more than six months late with a further 5% after 12 months.
Penalties will also be applied to Class1A NICs and Class1B NICs at the rate of 5% if not paid within 30 days of the due date; a further 5% if not paid within six months of the due date and a further penalty of 5% if still not paid 12 months after the due date.
These penalties will affect in-year payments due from May 2010 onwards. The first Class 1A NICs payment that the new rules will apply to is the payment due in July 2011.
Late payment of PAYE can also adversely affect an existing registration as a contractor. One payment over 14 days late or three payments as little as one day late can be enough to trigger the loss of gross status. This not only applies to existing contractors, but would be taken into account when registering in the future.
These penalties do not apply to any existing repayment plans in place, but will apply to any late payments made in the 2010/2011 tax year. If you anticipate problems paying any liabilities you should contact HMRC before the due date to try to arrange payment terms.
If you have any queries on this issue and would like further help and advice, please call your usual point of contact within the firm.
FLAT RATE SCHEME
Most percentages have now changed. Please note that some percentages have not decreased on sectors where HMRC have decided they were already too low.
Click here to download a pdf with full details.
FUEL SCALE CHARGES
The new fuel scale charges which take into account the reduction in VAT have been issued by HMRC.
Click here to download a pdf with full details.
TOP TIPS FOR RAISING BUSINESS FINANCE
If you are looking to raise money for investment, growth or acquisition you need to present a comprehensive and feasible business plan to provide comfort to the bank or venture capitalist that the proposition is well thought out and has a future.
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