HMRC has published guidance on the way interest is calculated, since 19 May 2014, when PAYE payments are made late.
For the tax year 2014/15 onwards (starting from 19 May 2014), HMRC will charge in-year interest each month rather than annual interest on any late payment of: PAYE tax, class 1 national insurance and student loan deductions; construction industry scheme (CIS) charges; in-year late filing penalties (which start from October 2014); and in-year late payment penalties (which will be charged automatically from April 2015).
The guidance explains that, in order to avoid paying interest, employers should pay by the due date the difference between what they report on their full payment submission(s) (FPS) received by the 19th of the month that follows the end of the tax month it relates to, together with any CIS charges for that tax month as well as any deductions reported on an employer payment submission (EPS), again by the 19th of the month that follows the end of the tax month it relates to.
If an employer needs to correct an FPS during the tax year and HMRC receives the corrected FPS after the 19th following the end of the tax month it relates to, the correction will be included in the following month’s charge. In these circumstances, the amount payable for the tax month is the amount actually reported by the 19th (rather than the corrected amount).
HMRC has published guidance on the way interest is calculated, since 19 May 2014, when PAYE payments are made late.
For the tax year 2014/15 onwards (starting from 19 May 2014), HMRC will charge in-year interest each month rather than annual interest on any late payment of: PAYE tax, class 1 national insurance and student loan deductions; construction industry scheme (CIS) charges; in-year late filing penalties (which start from October 2014); and in-year late payment penalties (which will be charged automatically from April 2015).
The guidance explains that, in order to avoid paying interest, employers should pay by the due date the difference between what they report on their full payment submission(s) (FPS) received by the 19th of the month that follows the end of the tax month it relates to, together with any CIS charges for that tax month as well as any deductions reported on an employer payment submission (EPS), again by the 19th of the month that follows the end of the tax month it relates to.
If an employer needs to correct an FPS during the tax year and HMRC receives the corrected FPS after the 19th following the end of the tax month it relates to, the correction will be included in the following month’s charge. In these circumstances, the amount payable for the tax month is the amount actually reported by the 19th (rather than the corrected amount).
