A person commits an offence if he or she “knowingly applies or permits the application of the amount of a deduction or withholding of tax made or deemed made under a tax law for any purpose other than in payment to the CIR”. If net wages are paid but the PAYE is not paid to the CIR by the due date, then the physical elements of this offence are deemed to have been committed.
Having cash flow difficulties isn’t a valid reason for not paying employer deductions. Failure to pay the full amount by the due date is a criminal offence and may result in any or all the following actions:
- Criminal prosecution with up to $50,000 in fines, up to five years imprisonment, or both.
- If the employer is a company, any directors or officers who are aware of the non- payment of employer deductions may be criminally prosecuted with up to $50,000 in fines, up to five years imprisonment, or both.
- Shortfall penalties of up to 150% of the employer deductions may be imposed.
- In the case of employers who are companies, shortfall penalties may be apporti
- These actions are in addition to any measures that Inland Revenue may take to recover the outstanding debt.
If you are struggling to meet PAYE obligations contact us for advice.
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