Penalties are charged if:
Your Full Payment Submission (FPS) was late
You didn’t send the expected number of FPSs
You didn’t send an Employer Payment Summary (EPS) when you didn’t pay any employees in a tax month
HMRC won’t charge a penalty if:
Your FPS is late but all reported payments on the FPS are within 3 days of your employees’ payday (this applies from 06th March 2015 to 5th April 2018), however employers who persistently file after the payment date but within 3 days may be considered for a penalty
You are a new employer and you sent your first FPS within 30 days of paying an employee
It’s your first failure in the tax year to send a report on time
How much the penalty is depends on the number of employees you have – ex. 1 to 9 employees - £100; 10 to 49 employees - £200, etc.
If you are over 3 months late there can be an additional penalty of 5% of the tax and National Insurance that you should have reported. If you have more than one PAYE scheme, you can be charged penalties for each.
If you get a penalty HMRC will send you a notice. If you don’t agree with HMRC’s decision to charge you, an appeal can be raised.