HM Revenue & Customs requires UK employers to report income tax and national insurance payments made by their employees once a year. Employers meet this obligation by filing an Employer Annual Return – a P14 for each individual employee, and a P35 summarising the details for their entire workforce.
Starting this year they must file their returns for PAYE online. The filing deadline is May 19.
To file online, employers should first register with the PAYE Online service. Do this by visiting HM Revenue & Customs website and clicking ‘Register for PAYE Online’.
Smaller employers can then use the Revenue’s free software to file their employee data securely online, while larger employers can purchase a range of commercial software.
Also note if employers file online they do not need to keep a hard copy of their annual return. As a consequence, HM Revenue & Customs will be reducing its stocks of hard-copy PAYE forms – P35s and P14s. (So consider your PAYE stationery requirements carefully before ordering paper forms.)
For more information visit the PAYE section of HM Revenue & Customs website (or take a look at the CD-ROM being sent to all employers).
New penalties for late payment
From May 2010, HM Revenue & Customs will also impose new penalties on employers who fail to pay PAYE on time – this includes income tax, National Insurance Contributions, student loan deductions and Construction Industry Scheme deductions.
Late payment penalties will range from 1-5% of the amount paid late; for in-year payments, the percentage charged increases as the number of late payments in the year increases.
Employers who anticipate problems paying on time should call HM Revenue & Customs Business Payment Support Service before the payment is due on 0845 302 1435. If they do this, and the Revenue grants additional time to pay, it will not charge late payment penalties – provided the business keeps to the agreement.
To learn more about the new penalties, visit HM Revenue & Customs website.
Depending on your circumstances, you may also want to consult a tax lawyer. You can find a solicitor specialising in tax for free via solicitor matching services, which can also help you to understand the best course of action for your situation and whether you are ready to hire a solicitor.
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