Urgent: mandatory PAYE changes
Key change.HMRC has issued an urgent reminder to employers about a key PAYE change which has recently come into force. For the first time, there’s now a mandatory requirement to file your Employer Annual Return online by May 19 after the relevant tax year has ended - this document consists of a P14 for each employee and a P35 summary sheet. There are a few exceptions to this rule, e.g. a person who employs their own carer, but the majority will be caught by it.
Do it now.If you have not filed your return online before, you must act now (see The next step). Any employer who fails to file their return online by the May 19 deadline will receive an automatic late-filing penalty. Previously, HMRC had an extra-statutory concession which allowed it to give you more time, but this has now been withdrawn.
What’s the fine? The penalty will depend on the precise number of P14s included in your return, but the maximum fine which can be imposed is £3,000. Not only will it apply for late filing, it can stand if you: (1) make a mistake; (2) try to rectify an error by submitting a further return online; or (3) file a paper return by the deadline but submit an online version later. So this new PAYE procedure is something you must now get right first time.
Tip 1. HMRC will reject returns for even the simplest of errors. To help you avoid the common traps - and unwittingly land yourself with a huge fine - read its new guidance: “Avoiding and correcting errors in your Employer Annual Return” (see The next step).
Tip 2. Once you have signed up to the online service, HMRC sends out a password through the post. It can take over a week to process. So don’t leave registration to the last minute; this could be expensive.
For further information on how to file returns online (PS 13.09.01A) and for information on “Avoiding and correcting errors” (PS 13.09.01B), visit http://personnel.indicator.co.uk.
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