Experience of PAYE late payment penalties?
Would appreciate any thoughts on this matter.
A company has for many years paid monthly PAYE by BACS on the same day every month that they pay the net pay for the following month. Payment goes through between 23rd & 25th rather than by 22nd.
They never realised apparently that this was late.
They had a PAYE inspection in March 2009 which went fine & the Inspector did not make any comment to indicate they were paying late & nor did he mention that shortly late payment would lead to penalties.
Last month they received a penalty notice from HMRC for 4% of the annual PAYE bill of £500K so of almost £20K.
If you calculate what late payment interest would be on around 3 days per month at, say, 5% then it would not be much over about £200.
The company appealed saying they were unaware of the new rules but HMRC has rejected the appeal saying they were sent a letter after the first month was late & they should have kept up to date via Employer Bulletins & by reading HMRC website. The company say they do not recall receiving the letter but even if they did it seems to me ludicrous to send one letter in May 2010 & then to make no further contact until out of the blue issuing a £20K penalty eighteen months later!
They are not a client of mine but I act for one of the directors & they have asked me to submit a follow up appeal to request an HMRC internal review.
I find just writing the above makes my blood boil at the sheer iniquity of it all! I can't believe that at the end of the day we won't be able to make HMRC agree there is "reasonable excuse" hopefully with just one letter but otherwise at a tribunal but I wonder if others are experiencing these penalties and if so what responses are being received to appeals?
Thank you for any comments or advice.