Are HMRC charging the new PAYE late payment penalties mentioned in the October 2010 blog?

To date I have only seen one case personally where the new penalties have been charged. I understand that HMRC have limits based on value and the number of late payments below which they are not charging penalties for 2010/11. Also they appear to only be charging the penalties once the full 2010/11 PAYE liability is settled – therefore where employers may have had financial difficulties in the current climate and have only just managed to pay in full, they may not have received a penalty notice yet.

In talking to other tax specialists, I know that there are numerous cases where employers have received notice of significant penalties. The lowest penalty I know of is just under £4,000 and the highest nearly £80,000. In all cases we would advise clients to consider appealing against the penalties partly because of the way HMRC have dealt with the new legislation – as far as we are aware HMRC only sent out one warning notice in May or June 2010 and HMRC have made no other effort to warn employers of the penalties they were building up.

I know that a number of penalties have been appealed against and cases are pending with the Tax Tribunal – I understand the first case may have been heard last month and the decision is awaited. Some Judges of the Tax Tribunal have been taken a strong line with HMRC when they consider they have not dealt with taxpayers fairly

If you have been charged any penalties (including VAT Default Surcharge) for late payment of tax or late submission of Returns by HMRC, it is always worthwhile speaking to your accountant or if they do not have experience in the Appeals field, a specialist, as there may be grounds for an appeal against these. The key is to do this promptly as if you leave it you may be too late to appeal. I am always happy to talk through a case in principle and advise whether we can help.