ECH21026 - Penalties: Class 1A NIC Failure to Submit Form P11D(b)

Regulation 81(2)(a) and 81(2)(b) Social Security (Contributions) Regulations 2001

These penalties parallel TMA Section 98A(2)(a) and 98A(2)(b) penalties.

First 12 months of lateness

Automatic fixed penalties are dealt with by the End of Year (EOY) Section. Caseworkers will include these penalties as part of the review settlement where

• they are appropriate and
• have not already been issued by EOY Section

It is important that you liase with EOY Section regarding these penalties.

The penalty is fixed at £100 per month, or part month, for each batch or part batch, of 50 earners for whom Class 1A is payable.

See ECH21020 for an example of how the calculation works.

Over 12 months of lateness

A further penalty in addition to the automatic fixed penalties above where the failure continues beyond 12 months.

• For example if the 2000-2001 return was not made by 19 July 2002, this additional penalty could be sought.

The maximum penalty before abatements is equal to the amount of unpaid Class 1A NICs at 19 July. See ECH21025 for how the calculation works.

Note that these penalties are based on 100% of the tax/NICs difference or the tax/NICs underpaid and are subject to Article 6 of ECHR ( ECH8026)

You should

• provide HRA advice and
• issue factsheet EC/FS4

to the employer at the earliest opportunity. ( ECH8027)

If it has been necessary to issue formal determinations or decisions consideration should be given to making penalty determinations ( ECH21135) at the same time and listing all appeals for the same Commissioners hearing.

The Note at ECH21025 applies equally to Regulation 81(2)(a) and 81(2)(b) as Section 98A(2)(a) and 98A(2)(b) penalties.