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new PAYE penalties?

new PAYE penalties?

I was speaking to an HMRC officer last week and he advised that there would be yet another layer of PAYE penalties from this April.  He insisted that even if there was no liability for a quarter, if the employer did not advise HMRC of this a penalty would be raised.  I have checked and cannot find reference to this, which must be a flat-rated penalty as it is not a % of tax that is late.  Anyone else know of this?   I need to warn clients so need to know where I can find out about it, and how much it is likely to be.

Any information gratefully received.


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28th Feb 2011 18:53

Oh the mess we are all in!

The new penalty system is so stupidly complicated.

You are probably looking at Sch 56 FA 2009, a penalty for failure to make payments on time. It came in for PAYE on 6/4/2010. It is tax geared, so no tax no penalty. I can only conclude that to automate a system you will have to, like CIS, file a nil return in the future. You are of course, meant to notify of nil payments currently

Virtual tax support for accountants: www.rossmartin.co.uk


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01st Mar 2011 10:26

nil payments penalties

Thanks for that Nicola, but I am afraid it is still not clear to me.  Are they instigating new penalties?  Experience of HMRC teaches me that I cannot just take one officer's conversation as proof that something is as he says, which is why I put it on here.   Do you know if there is anything new that has been issued to confirm the CIS like penalties for nil returns  being isssued from April?

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01st Mar 2011 11:04

Don't panic!

I have never heard of late filing penalties for nil monthly/quarterly PAYE payslips.

Nichola has never heard of them.

They are not mentioned on the HMRC website.

They are not mentioned in the PAYE Late Payment [my emphasis, not late filing] Penalties section on page 19 of the February 2011 Employers Bulletin, No. 37.

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01st Mar 2011 11:29

Thanks to both of you

I can go from red alert back down to amber!

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01st Mar 2011 11:54

Not leaping to HMRC's defence here, but...

The guidance from HMRC is that where PAYE payments are nil, then this should be reported to HMRC. Admittedly, there may be no legislative or statutory basis to this "must", but it is still there in black-and-white. It is not too great a hardship and keeps HMRC from sending out automated nagging letters or spurious penalty demands.


You must let HM Revenue & Customs (HMRC) know if you have no PAYE/NICs payment to make for a month, quarter or previous year. Please notify HMRC on or before your normal payment date to stop payment reminders.

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01st Mar 2011 12:26

Real time PAYE?

Another possible source of this misinformation is the PAYE reform consultation.  Since HMRC were allocated £100m in last year's spending review in order to implement stage 1 - a "real-time" PAYE system - that seems to me to be a fait accompli.

What real-time PAYE will mean in practice is regular reporting of data (including nil data).  Regular will obviously be at least monthly for larger employers, but hopefully sense will prevail and there will be less frequent reporting required of smaller employers.  As ever there will inevitably be some carrots and lots of sticks.

That's obviously not all just going to magically happen this April though.

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