PAYE specified charges when payroll is not reported

When an employer does not send a Full Payment Submission (FPS), or an Employer Payment Summary (EPS) saying nobody was paid, HMRC’s system raises a specified charge: an estimate of the PAYE tax, National Insurance and student loan deductions due for that month, based on the employer’s earlier submissions. It is an enforceable debt under regulation 75A of the PAYE Regulations. The only reliable way to remove it is to send the missing FPS or EPS for that month.

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What is a specified charge?

HMRC’s Debt Management manual at DMBM519250 describes a specified charge as the amount HMRC’s system creates when an employer fails to submit its Real Time Information returns. It is an estimate of the tax, National Insurance contributions and student loan deductions for the month, raised under regulation 75A of the Income Tax (Pay As You Earn) Regulations 2003 (SI 2003/2682), which was inserted by amending regulations in 2012.

Regulation 75A applies 17 days or more after the end of a tax period if one of three conditions is met:

Condition A: the employer has paid no tax for the period, made no FPS or EPS for it, and sent no notification under regulation 67F, and HMRC are not satisfied that no payments were made to employees.
Condition B: the employer has paid something, but HMRC, after asking for an explanation, are not satisfied it is the right amount.
Condition C: the employer has not paid the amount due under regulation 67G.

The most common case in practice is condition A: payroll ran, or may have run, but nothing was reported.

How does HMRC calculate the estimate?

Regulation 75A(5) lets HMRC specify, to the best of their judgment, the amount they consider the employer is liable to pay. Regulation 75A(6) lists what they consider, including the employer’s record of past payments and its returns for the period and for earlier periods.

DMBM519250 explains the automated version. HMRC’s system reviews the employer’s record on the 22nd of the month. If no FPS or nil EPS has been received, it takes the year to date tax, National Insurance and student loan figures reported on the previous month’s submissions and divides them by the number of months those submissions cover. The result is the specified charge for the month. GOV.UK confirms that the estimate is based on previous PAYE payment and filing history and that the charge appears in the employer’s PAYE online account.

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Is a specified charge a real debt?

Yes. Regulation 75A(5)(b) allows HMRC to serve a notice requiring payment within 7 days. Under regulation 75A(10), any part not paid in that period is treated as tax the employer was liable to pay for the period, and HMRC can prepare a certificate of the unpaid amount for use as evidence in recovery. DMBM519250 states that specified charges are legally enforceable under regulation 75A.

Interest also runs. HMRC’s guidance on interest for employers lists specified charges among the PAYE amounts that carry late payment interest, charged daily from the due date (the 22nd for electronic payments) until paid. That guidance also says there is no right of appeal against an interest charge.

If paying a specified charge means the employer has paid more than the true liability for the year, regulation 75B allows the excess to be set off against later PAYE payments or, once the tax year has ended, repaid.

How do you get rid of it?

File the missing return. GOV.UK says a specified charge does not replace the need to send the FPS or EPS, and only sending the missing submission for each month will replace the charge with the amount actually due and support an appeal against a late filing penalty.

The order of filing is important:

If you skip the missing month and simply send updated year to date figures on the next FPS, GOV.UK says the specified charges stay in place, although your accounting record is adjusted to reflect the later year to date figures.
Where specified charges have been raised for several months in a row, DMBM519250 says an FPS for the latest month reverses only the latest specified charge.
An EPS showing that no employees were paid, received after the 22nd, reverses the charge. It will not do so if an FPS has already been processed for a later month in the same tax year, because the specified amount then forms part of the year to date figure.

After 19 April, an FPS for the earlier year can no longer be sent and corrections go on an Earlier Year Update (EYU). DMBM519230 says that where no month 12 FPS was ever sent, an EYU reverses the month 12 specified charge and replaces it with an actual charge.

Reconciling a PAYE account with several estimated months is easier with a clear method, set out in reconciling your PAYE account with HMRC.

Can you appeal against a specified charge?

Regulation 75A does not provide an appeal. Its own safeguard is in regulation 75A(8) and (9). If, during the 7 day notice period, the employer claims that what it paid was the full amount it was liable to deduct but HMRC are not satisfied, the employer can require HMRC to inspect its PAYE records as if they had been asked for under Schedule 36 to the Finance Act 2008. If that inspection happens, the notice must be disregarded.

Where HMRC want to fix a disputed liability formally, the usual route is a determination under regulation 80, which can be appealed. See regulation 80 determinations.

What about quarterly payers and schemes with no staff?

Paying quarterly does not change the filing rule. DMBM519250 says an employer paying quarterly because it is below the £1,500 monthly limit must still send an FPS whenever, or before, it pays employees, so HMRC expects an FPS or EPS every month. Specified charges for quarterly payers are not reversed just because payment is quarterly; they stay until the FPS or nil EPS replaces them.

The same page says a specified charge can be cancelled if it was created in error, for example because the scheme had ceased. A business that has stopped paying staff should therefore close the scheme properly or send nil EPSs, rather than simply stop filing.

Does filing late still lead to a penalty?

It can. GOV.UK says a penalty can be charged where an FPS is late or an expected FPS or EPS is not sent, with the monthly amount depending on the number of employees: £100 for 1 to 9, £200 for 10 to 49, £300 for 50 to 249 and £400 for 250 or more. No penalty is charged for the first failure in a tax year, or where reported payments are within 3 days of payday. Details, including appeal grounds, are in PAYE late filing and payment penalties and late reporting reasons on an FPS.

How might this work in practice?

Illustration only. An employer’s FPSs for months 1 to 5 show year to date tax, National Insurance and student loan deductions of £20,000. Its payroll bureau fails to send the month 6 FPS. On the 22nd HMRC’s system divides £20,000 by 5 and raises a specified charge of £4,000 for month 6.

Two staff left in month 6 and the real liability was £2,500. If the employer sends the month 6 FPS, the £4,000 is reversed and replaced with £2,500. If instead it ignores month 6 and sends a month 7 FPS with correct year to date figures, the month 6 specified charge remains on the record and the account is adjusted, which can leave a confusing statement and an unnecessary penalty position.

What mistakes do employers make?

Paying the estimate and treating that as the end of it, when the FPS is still outstanding.
Fixing the gap through the next FPS’s year to date figures instead of filing the missing month.
Stopping all submissions when there are no staff, instead of sending a nil EPS or closing the scheme.
Writing an appeal against the charge, when the remedy is the return or, if HMRC then determine the liability, an appeal against that determination.
Forgetting that interest runs on the specified charge until it is paid or replaced.

The same logic applies to VAT, where a missing return produces a central assessment that is also removed by filing.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 24 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.