HMRC have announced a number of changes which will affect Employer Annual Returns and starter and leaver PAYE forms this financial year.
Employers with fewer than 50 employees must now send starter and leaver forms — P45s, P46s and similar pension information — online to HMRC. Penalty notices will be sent out to employers who have not filed their starter and leaver forms online, with the first penalties applying for the 3 month period to 5 April 2011 and further penalties issued quarterly thereafter.
A concession which gives employers additional time before HMRC charge a penalty for late payment has been withdrawn. This means that all employers who submit their Employer Annual Return after 19 May will now receive a late-filing penalty. Additionally, a penalty will be issued to employers who file their annual return on paper. Last year, no penalty was charged for employers with five or fewer employees but these arrangements have now ended.
From May this year, HMRC will also start sending out penalties for late payment of PAYE. Employers will be liable for a penalty if they haven’t made PAYE payments on-time, and in-full from April 2010. The amount of the penalty will depend on the amounts paid late and the total number of late payments made. Penalties will be charged after the tax year-end.
If an employer has not previously sent their return online they should register here for HMRC’s online service. The HMRC has also produced a list of common errors to avoid, which can be found here.