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PAYE update for employers – how to avoid fines

The Revenue has announced some changes to PAYE.  Please read on to avoid being fined.

Changes to Annual Returns (P35 forms) and starter and leaver forms
• From April 2011, employers with fewer than 50 employees must send starter and leaver forms – P45s, P46s and similar pension information – online to HMRC.

• Automatic penalties will apply to all P35 forms filed after 19 May. The ‘extra time concession’ has been withdrawn.

•  Automatic penalties will be issued if you try to file a paper P35 – all forms must be filed online.

Other potential pitfalls and penalties
HMRC will also be issuing PAYE penalties this spring for the first time in two key areas:

•  Automatic penalty notices were sent out in April to employers with 50 or more employees who had not filed starter and leaver forms online to HMRC.

The first penalties will apply for the three-month period to 5 April 2011, with further penalties being issued on a quarterly basis.

• From May this year, HMRC will 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 2011. The size 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.

Further information is available on the changes from the HMRC website at or via its Employer Helpline on 08457 143 143.

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