New guidance has issued on how to avoid penalties and the late payment interest.

HMRC charges penalties when:

• a full payment submission (FPS) is late, or
• the expected number of FPSs for a tax month were not received by HMRC, or
• an employer payment summary (EPS) is not submitted when no employees were paid in a tax month (a nil payment EPS).

To prevent late payment interest accruing, employers should pay penalties within 30 days of receipt of the relevant notice.

HMRC will not charge a penalty when:

• a new employer sends its first FPS within 30 days of paying an employee, or
• it is a first failure in the tax year to send a report on time (this does not apply to annual PAYE schemes).

The guidance does refer to the temporary three-day late filing penalty relaxation which applied from 6 March 2015 up to 5 April 2017. This easement has now been confirmed as existing for 2017/2018.

The updated guidance also covers:

• the quantum of the penalty (which depends on employee numbers),
• penalties for submissions more than three months late,
• ‘specified charges’ (which are HMRC’s estimate of what the employer owes) – the employer can view these on their PAYE account online,
• grounds for appeal (the penalty notice should include details on how to appeal), and
• penalties for inaccurate reports.