Penalties for filing PAYE returns late start at £100 per month for the smallest payrolls, and rise to £400 per month for payrolls with 250 or more employees. You can make one late submission before a penalty is imposed, but how do you stay within the rules?

Employers must file the full payment submission (FPS) report for their payroll on or before the earlier of:
• the day on which the employees are actually paid;
• the date on which those employees become entitled to their pay

Say the employment contract states that your employee is entitled to be paid on the 28th of each month, but in August you ran the payroll and made payments on 29 August as 28 August was a Bank Holiday. In that case, the FPS sent on 29 August is deemed to be late as it was submitted after the day on which your employee became entitled to his pay. This rule applies even if the individual was actually paid a day late, i.e. on 29 August

To avoid such technical breaches of the rules, HMRC has introduced a concessional three-day grace period for filing the FPS. However, this is not a change to the rules. Employers who persistently file the FPS late, even within the three-day grace period, will be warned and considered for a penalty.

HMRC sends out penalties to employers by letter, not by email or GNS message (the electronic messaging service within PAYE online). If you have a reasonable excuse for late filing you can appeal against the penalty online or by post. We can make this appeal on your behalf.