Last updated: 14 October 2026
What can you do if you’ve missed a PAYE payment deadline?
Pay what you owe as soon as possible, and contact HMRC if you can’t pay in full. PAYE is due by the 22nd of the next tax month if you pay electronically (19th by cheque). Late payment interest is charged from the due date. Late payment penalties of 1% to 4% of the late amount apply depending on how many times you have been late in the tax year. The first late payment in a tax year usually isn’t penalised.
Late payment penalties
| Number of late payments in the tax year | Penalty on the amount paid late |
| 1 | No penalty (the first default) |
| 2 to 4 | 1% |
| 5 to 7 | 2% |
| 8 to 10 | 3% |
| 11 or more | 4% |
The first late payment doesn’t count as a default, so the 1% band covers defaults 1 to 3 (late payments 2 to 4). An extra 5% applies if a payment is still unpaid after 6 months, and another 5% after 12 months.
Steps to take now
- Pay the outstanding PAYE immediately, using the correct payment reference for the tax month
2. If you can’t pay, call HMRC’s Payment Support Service to ask for Time to Pay
3. Check that your FPS and EPS submissions are up to date, because late filing has its own penalties
4. Claim Employment Allowance on your EPS if you are eligible, which may reduce what is due
5. Set up a direct debit or a payment reminder for the 22nd
Late filing is separate
If your FPS is late, HMRC can charge filing penalties each month, based on the number of employees: £100 for 1 to 9 employees, £200 for 10 to 49, £300 for 50 to 249 and £400 for 250 or more. HMRC doesn’t usually charge a penalty for the first late filing in a tax year, if all payments on a late FPS are within 3 days of payday, or if a new employer sends its first FPS within 30 days of paying an employee.
Example
A company with 8 employees pays its £3,000 PAYE bill late for the third time in the tax year. The penalty is 1% of £3,000 = £30, plus interest.
Appealing a penalty
You can appeal within 30 days if you have a reasonable excuse, such as serious illness, a bank failure or an HMRC system problem.
Preventing future problems
- Ring-fence PAYE money in a separate account on payday
- Pay by direct debit through your business tax account
- Ask your payroll provider to send reminders
- Pay quarterly if your average monthly PAYE bill is under £1,500
Records to keep for PAYE
Keep payroll records, including payslips, FPS submissions and payment confirmations, for at least 3 years after the end of the tax year. Keep evidence of the date you paid HMRC, so you can appeal if a penalty is charged in error.
Frequently asked questions
Will HMRC take action straight away?
Not usually, but it can start debt collection if you ignore it.
Can directors be personally liable?
In some cases, for example deliberate non-payment or under certain insolvency rules.
Does interest apply to CIS deductions too?
Yes, they are part of your PAYE bill.
Do penalties apply if I pay part of the bill?
Penalties are based on the amount paid late.
Related: small business payroll and PAYE registration.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with PAYE payments and penalties. See our payroll services service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
