Employers face penalties for late payment of PAYE & CIS

Provisions are being introduced from 6 April 2010 to charge penalties on the late payment of monthly PAYE and CIS.  A penalty will not be levied for the first default but penalties will then increase as follows:

• up to 3 defaults - 1% of the amount paid late
• 4-6 defaults - 2% 
• 7-9 defaults - 3%
• 10+ defaults - 4%

If tax is more than 6 months overdue, a 5% penalty can be charged with an additional 5% if the tax becomes 12 months overdue.