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May 2014


How to avoid late payment interest

HMRC have published important information on how to avoid late payment interest and what to expect if a 2014 to 2015 PAYE or CIS payment is late.

As previously announced, HMRC will now charge interest on any late PAYE and Construction Industry Scheme (CIS) payments. For employers that pay monthly, the first payment of 2014 to 2015 was due by 19th May (or by the 22nd May for employers who pay electronically).

To avoid an interest charge, employers should pay by the due date the difference between the following:

· what they report on their Full Payment Submission(s) (FPS), received by the 19th of the month following the end of the tax month it relates to, together with any CIS charges for that tax month.

· any deductions reported on an Employer Payment Submission (EPS), again received by the 19th of the month following the end of the tax month it relates to.


Making Corrections

If employers make a correction on an FPS that HMRC receives after the 19th of the month 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).


Interest Charges

HMRC will charge interest on all unpaid:

· PAYE tax, Class 1 National Insurance and Student Loan deductions, including specified charges (estimates HMRC makes in the absence of a PAYE submission)

· Construction Industry Scheme charges

· In-year late filing penalties, which start from October 2014

· In-year late payment penalties, which will be charged automatically from April 2015

HMRC will charge interest daily, from the date a payment is due and payable to the date it is paid in full. Employers will be able to see an estimate of the interest building up on their Business Tax Dashboard. HMRC’s At a glance: interest from 2014 to 2015 helpsheet provides further information on:

· The due dates of payment

· How in-year interest is calculated

· Interest on overpayments

· How HMRC will calculate interest on a charge that employers didn't agree with

· What an employer should do if they cannot pay