PAY PAYE ON TIME TO AVOID PENALTIES

Penalties are charged if PAVE is paid late on more than one occasion in the tax year.

The penalty charged for late payment is a percentage of the PAYE paid late.

The penalty rate is linked to the number of occasions on which payment was made late in the tax year, ranging from 1% if payment is made late on two, three or four occasions in the year to 4% if payment is made late on 11 or 12 occasions.

A further penalty of 5% is charged if payment is outstanding after six months. If payment remains due after 12 months, a subsequent 5% penalty is levied.

A PAYE month runs to the 5th of each month. Where payment is made electronically, cleared funds must reach HMRC's bank account by the 22nd of the month. Payments of PAYE and NIC must reach HMRC by the 19th of the month if paid by cheque.