Are Your PAYE Payments in Arrears?

Are you a business owner facing financial pressure and struggling to pay your HMRC bills? If the answer is yes, then you may have accumulated arrears of tax in relation to Pay as You Earn (PAYE) and National Insurance Contributions (NIC).

Over the years, HMRC have improved the way they gather their information and since the introduction of Real Time Information (RTI) for filing monthly online payroll results, HMRC’s system allows it to automatically recognise when tax payments have not been made.

Your PAYE tax bill includes

• Employee income tax deductions
• Class 1 and 1B National Insurance
• Student Loan repayments
• Construction Industry Scheme (CIS) deductions

What do I do if I have PAYE arrears with HMRC?

HMRC have a rule in place where all payments need to be made on time for all businesses being set for the 22nd of the month, or the 19th day if you are paying by cheque through the post.

We cannot stress enough, if you are not able to pay your PAYE debt, you need to call HMRC as soon as possible and make contact with them.

Sometimes you will not be able to stop interest or penalties accruing, but you may be able to agree a Time to Pay Arrangement with them. Although may be scary to call the HMRC if you are in arrears, it’s very important and they are there to help you.

What are the penalties & interest?

The table above shows you the penalty percentage that will be applied. It’s important to note that daily interest will continue to accrue on all unpaid amounts. If you pay less than what is due you will face a late payment penalty, if this is still outstanding after six months then an additional penalty of 5% will be charged on top of the amount unpaid.

What steps will HMRC take if I accrue PAYE debt?

There are a number of steps that HMRC can take in order to enforce payment, it is important to know that if you do not react to this and take action, it will only make the situation worse for you and your business.

If it is cash flow difficulties that you are facing then HMRC have a recovery process that they will put in place, this starts with demand letters which you cannot ignore. The consequences can lead to your company going into liquidation and you may become personally liable for the losses incurred to creditors.

Not sure what to do?

If your company is struggling with unmanageable HMRC debts, poor cash flow, or an uncertain future, you are not alone. We speak to company directors struggling with the same issues as you every single day, and we are here to give you the help and guidance you need.

Call our team for free, no-obligation advice today on 0800 975 0380 or book a free consultation