Introduction Amount of penalty for failure to pay PAYE & CIS amounts
14.Paragraph 5 applies paragraphs 6 to 8 (the penalty structure) to payments of tax under the PAYE or CIS regulations, except where HMRC has allowed or directed that the relevant period last six months (or more).
15.Paragraph 6(1) provides that a person is liable to a penalty of an amount determined by reference to the number of defaults of payments made of the same tax during the tax year. A default is defined in paragraph 6(2) as a failure to pay an amount of tax in full by the due date.
16.Paragraph 6(3) states that the first failure to pay an amount of tax due by its due date during a tax year does not count as a default.
17.Paragraph 6(4) provides that, where a person has one, two, or three defaults in a tax year, the taxpayer is liable to a penalty of 1 per cent of the total amount of those defaults.
18.Paragraph 6(5) provides that, where a person has four, five or six defaults in a tax year, a penalty of 2 per cent of the total of the defaults arises.
19.Paragraph 7 provides for a penalty of 5 per cent of the unpaid tax where the tax is unpaid six months after the penalty date.
20.Paragraph 8 provides for a penalty of an additional 5 per cent of the unpaid tax where the tax is unpaid 12 months after the penalty date.