Schedule 56: PAYE Late Payment Penalties

Jun 27, 2013


By Lyndsey Hall



Back in April 2010, Schedule 56 of the 2009 Finance Act was rolled out by HMRC, introducing a new penalty regime for late paid PAYE and NICs.


For those of you who don’t know, the penalty applies to PAYE, including PAYE settlement Agreements and determinations; National Insurance contributions (NICs), including annual payments of Class 1A; Construction Industry Scheme (CIS) deductions; and Student Loan deductions. Penalties apply even if you are only a day late, however, HMRC will only notify a late payment penalty charge after the end of the tax year, and has up to two years to issue a penalty letter to the offender. This has resulted in HMRC coming under attack at the Tax Tribunal for unfair conduct, but, unfortunately, this has not affected the Tribunals decision, which in most cases upheld HMRC’s decision.


Fortunately for our clients, there is a little known section in the legislation which impacts on the way that HMRC should be charging Schedule 56 penalties, and Knowles Warwick have successfully argued this point at the First Tier Tribunal.


In light of this success, Knowles Warwick is offering to help Employers by fighting HMRC on a no win, no fee basis. Even if you have lost an appeal at the First Tier Tribunal, we can apply for permission to appeal to the Upper Tribunal and the unpaid penalty will continue to be held over until the penalty is either waved by HMRC or is upheld by the Upper Tribunal.


So, if you or one of your clients have been charged a Schedule 56 PAYE Late Payment Penalty; if you feel you have been treated unfairly by HMRC; or you believe that the penalty you were charged was excessive, then please get in touch to find out what we can do for your business.


For more information about Schedule 56 of the 2009 Finance Act, visit HMRC’s website.



Related articles:

HMRC Shut Down Unused PAYE Systems

RTI – Are You Ready?

RTI: An Update



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