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Late P11D(b) penalties

capped at tax due?

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Good morning

A new Ltd co client has just given me their y/e accounts to be filed by the end of this month.

The Ltd co doesn't have a PAYE scheme (director has another job) however a benefit in kind on a director's loan (over 40K) should have been reported on 6th July 2017. It's too late to have him pay interests now so it looks like the only option is to register the company for PAYE and file a late P11D(b).

The amount assessable is fairly small and the class 1A due under £100. Normally late filing would attract £100 per month (i.e £800) however am I correct in thinking that the penalty is capped at the tax due? 

Many thanks.



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By Wanderer
15th Feb 2018 12:13

"The penalty is fixed at £100 per month, or part month, for each batch or part batch, of 50 earners for whom Class 1A is payable.

The total penalty payable is capped by virtue of regulation 81(5) of the same regulations. Regulation 2(a) says ‘shall not exceed the amount of Class 1A contributions in respect of the year to which the return in question relates.’

This means that if the liability on the P11D(b) is nil then the penalty will be capped to nil."

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Replying to Wanderer:
By Chipette
15th Feb 2018 12:15

Perfect thank you:-)

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