TAX TITBITS - 16.02.2006

Which box did you tick?

P11Ds 2004/5. The Taxman has issued a public apology to employers and their advisors for any inconvenience caused by an error in his systems. So what’s happened now? This time he’s sent some 10,000 penalty notices to employers concerning P11Ds for 2004/5 when, in fact, no penalty was due. How could this happen?

Computer error. The official story is that the computer system did not recognise the need to stop the penalty notice where the employer ticked the box on their employer annual return, Form P35, stating that P11D and P11D(b) (employers’ NI on benefits-in-kind) were not due.

Any action required. The Taxman says that all affected employers have been identified and the penalty notices discharged automatically. But this is the same computer system that made the error in the first place! Go back to your P35 for 2004/5 and see which box you ticked. If you could be one of the unlucky 10,000, contact your PAYE office to make sure any erroneous penalty has, in fact, been discharged.