Taxes Management Act 1970 section 98A

Special penalties in the case of certain returns

Section 98A sets out the special penalty regime that applies when employers or contractors fail to file returns required under PAYE regulations or construction industry scheme regulations.

• PAYE and construction industry scheme regulations can designate specific provisions to which this penalty regime applies
• Monthly penalties of £100 (scaled by the number of employees or sub-contractors covered) apply for up to 12 months of continued failure to file
• If the failure continues beyond 12 months, an additional penalty applies: for PAYE, up to the amount of tax unpaid at 19 April following the tax year; for construction industry scheme returns, up to £3,000
• The monthly penalty scales upward in £100 bands for every 50 persons who should have been included in the return