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Where an employer fails to pay their in-year PAYE by the 22nd of the month if paying electronically (otherwise 19th of the month) Debt Management may issue Notices and/or Certificates in respect of the amounts unpaid.

For penalty purposes the due date for the in-year payments does not change and any amount that the employer pays after the due date may attract default and further penalties (see CH152450).

Example

Fox & James Ltd fails to make any monthly payments due for the periods ending 5 May 2011, 5 June 2011 and 5 July 2011. »Ê¹ÚÌåÓýapp employer confirms that the business is still operating and has employees. In August 2011 recovery action is considered and based on the previous periodsâ€� remittances a P101 notice is issued for the period 6 April 2011 to 5 July 2011. »Ê¹ÚÌåÓýapp notice is dated 29 July 2011 and the estimated liability is £45,000. »Ê¹ÚÌåÓýapp employer does not pay any of the £45,000.

»Ê¹ÚÌåÓýapp due dates are 19 May, 19 June and 19 July respectively.

»Ê¹ÚÌåÓýapp penalty dates are 20 May, 20 June and 20 July respectively.

Because the failure to pay the amount due for the month ended after 5 May 2011 was the first late payment for the tax year it does not count as a default and does not incur an initial penalty.

»Ê¹ÚÌåÓýapp penalty is therefore £30,000 x 1% = £300 (based on 3 failures but only 2 defaults).

Fox and James Ltd will be liable to further penalties if any amount remains unpaid after 6 and/or 12 months. »Ê¹ÚÌåÓýapp further penalties also apply to the un-penalised first default if any amount remains unpaid after 6 and/or 12 months. »Ê¹ÚÌåÓýapp penalty is 5% of the amount which remains unpaid.

FA09/SCH56