The National Minimum Wage (NMW) rates have increased by over 10% (from 1 April); some employers are feeling the pinch in addition to costs such as food and energy.  It’s tempting to use the amounts deducted from payroll to pay pressing bills, but we advise against this.

Currently, if the payroll deductions are not paid over to HMRC on time – by 22nd of each month – late payment interest is charged, currently at 7%,

In addition to the late payment interest, late payment penalties are charged as follows:


Number of late payments in tax year



Additional after 6 months Additional after 12 months





2 – 4




5 – 7




8 – 10




11 or more 4% 5%


An employer won’t receive a penalty if they are late with just one payment in the tax year, as long as the amount due is paid to HMRC within six months.  However, most employers need to make monthly payments and the penalties will soon mount up where the timing of the payment slips for even one day.

What can employers do if they can’t pay their PAYE & NIC?

If you are a smaller employer and are struggling to pay your PAYE on time, you should apply for a time to pay (TTP) agreement through your business tax account as we are unable to make an application on your behalf.

A TTP agreement will be granted automatically if the following conditions are met:

  • All PAYE and CIS returns have been submitted;
  • PAYE debt is less than £15,000;
  • No other tax debts exist;
  • Application is made be within 35 days of the date the PAYE was due; and
  • TTP plan will pay off the debt within 6 months.

If the above conditions can’t be met, you should contact HMRC on the payment support service: 0300 200 3825 to negotiate a TTP agreement.   Please contact us if you need any help negotiating a time to pay agreement.

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