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.
You will include these penalties as part of the case settlement where
- they are appropriate and
- have not already been issued by ECS.
It is important that you liaise with the 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.
The total penalty payable is capped by virtue of regulation 81(5) of the same regulations. Regulation 2(a) says “shall not exceed the amount of Class 1A contributions in respect of the year to which the return in question relates.”
See ECH21020 for an example of how the calculation works.
Over 12 months of lateness
This provides a further penalty, additional to the fixed penalties above, where the failure continues beyond 12 months.
For example if the 2006-2007 return was not made by 19 July 2008, 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 NICs difference or the NICs underpaid and are subject to Article 6 of ECHR (ECH8026).
You should
- provide HRA advice and
- issue factsheets EC/FS3 & EC/FS4
apply S97A TMA 1970
to the employer at the earliest opportunity (ECH8027).
See the example at ECH21025 for advice on how to apply both the first 12 months and over 12 months of failure in practice.
If it has been necessary to issue a decision consideration should be given to issuing penalties (ECH21135) at the same time.
Section 8 NICs Decision ECH22091.
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.
Where a late return is also found to be incorrect S98A4 (Sch 24 for returns due to be filed from 1-4-2009) penalties need to be considered ECH21040. You must
when calculating two or more duty geared penalties (ECH21047)
