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PAYE DEADLINES FOR EMPLOYERS

The submission of H M Revenue & Customs (HMRC)
PAYE forms on time has become more and more
important, particularly since fixed penalties are increasingly imposed in an automatic fashion.

With fewer blank forms being issued to employers in annual 'packs' and acting as reminders, it is all too easy to overlook a deadline and suffer the consequences.

Electronic Year End Filing

A further consideration in 2007/08 is the incentive offered to small employers (under 50 employees) if they voluntarily file online before they are required to do so in 2009/10. Medium sized and large employers (50 employees and over) are already required to file online.

Employers do not have to do the online filing themselves. An agent or payroll bureau can file online on their behalf.

The incentive payment for small employers, £150 for this year, will be credited to the employer's PAYE account once the P35 has been successfully filed.

Electronic Payment

Where an employer makes their PAYE payments
electronically, whether by BACS or any other electronic
means, the payments will be due by 22nd of each month, as opposed to the 19th for the 'manual' payment methods.

Forms P35 & P14

End of Year Returns, showing details of Pay and PAYE Tax & National Insurance deductions (forms P35 and P14) must be submitted to the relevant PAYE Tax office by 19 May 2008.

HMRC apply a range of quality checks on end of year returns filed on-line, and that any return that fails the checks will be rejected. To avoid the risk of a penalty a corrected return must be re-submitted, and pass the checks, before 19 May.

Where the Return is still outstanding after this date, HMRC will pursue an automatic penalty of £100 for every month or part-month that the Return is late, multiplied by the number of 'units' of 50 employees. Therefore, a firm with 51 employees which filed its P35 on 20 June 2008 would count as being two months late and as having two 'units' of 50 employees. The fine would accordingly be £400.

For incorrect forms P35, there is a maximum penalty of 100% of any additional tax found to be due.

The total Tax and National Insurance due for 2007/08 should be paid to the Collector of Taxes by 19 April 2008. Interest will be charged on late payment.

Forms P11D & P9D

These forms, which notify HMRC of the amount of any benefits/expenses paid to directors/employees, must be submitted to the PAYE Tax Office by 6 July 2008.

There is an initial penalty of £300 for late submission of these forms, together with a daily penalty of up to £60 where an initial penalty has been imposed.

In addition, any errors on the forms through negligence can attract a penalty of up to £3,000 per form. Timely and accurate submission is therefore essential.

Remember to include VAT, whether or not reclaimed from HMRC, in your figures of expenses and benefits.

Blank forms P11D and P9D will not be issued automatically, but are available upon request via the HMRC Orderline on 0845 764 6646, or at www.hmrc.gov.uk

National Insurance

Class 1 National Insurance Contributions (NICs) payable in respect of 2007/08 salary are included on forms P14 and P35 and are part of the total tax and NIC paid throughout the year or of the balance due by 19 April 2008.

Class 1A NICs are due on most taxable benefits (e.g. car, car fuel, non qualifying loans, private medical insurance, school fees if not liable to Class 1). Details of the benefits liable to Class 1A NICs are given in the HMRC leaflet CWG5 which may be obtained from the Employer's Orderline on 0845 764 6646 or at www.hmrc.gov.uk

The Class 1A NIC payable on benefits is determined by
and obtained from the entries on the relevant forms P11D. The total Class 1A NIC payable is returned on form P11D(b) and is due for payment by 19 July 2008. A payment slip is attached to the form P11D(b) for this
purpose.

Forms P11D(b)

This form confirms that all relevant forms P11D for the
year have been submitted and returns the Class 1A NICs due. As with the form P11D, it must be with the PAYE Tax Office by 6 July 2008.

A blank form may not be supplied and may have to be
requested from the HMRC Orderline.

A P11D(b) does not need to be completed if the P35 has
been ticked to confirm that forms P11D are not due.

PAYE Settlement Agreements

Where an employer wishes to settle a 2006/07 tax liability on behalf of an employee, it may be possible to enter into a PAYE Settlement Agreement (PSA) with the Inland Revenue. Any liability arising under such an agreement is due for payment by 19 October 2008.

Self Assessment

Employers are required by law to provide employees and directors with the following details to assist them in dealing with their Self Assessment responsibilities and any child tax credit and/or working tax credit claims:

• Their 2007/08 form P60 (by 31 May 2008)

• A copy of their 2007/08 form P11D or P9D (by
  6 July 2008)

Failure to do so can result in an initial penalty of £300 per form, plus a further penalty of up to £60 per form for each day that failure continues.

As well as providing this information for all current employees, it is worth considering sending copies of these forms by post to those who have left during the year, as they remain entitled to receive such information after they have left.

Summary - Key Dates

Please note: This guide is intended to provide basic information only. Where specific advice is required, we recommend that you seek proper professional help; either from this firm or other suitably qualified person or practice.