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Submit year end tax forms online

Electronic filing of employer's PAYE forms for staff will soon be compulsory. By Dr Jeremy Phipps.

Now that the 2008/9 tax year has run its course, it is time for all employers including GP practices to put together the end of year PAYE deductions details for your staff required by HM Revenue & Customs (HMRC).

The deadline for submitting this information on the Employer Annual Return P35 form and, for each staff member, an End of Year Summary P14 form is 19 May 2009.

PAYE deadlines
  • 19 April 2009 - pay HMRC any outstanding employee tax and national insurance deductions for the 2008/9 tax year.
  • 19 May - submit a P14 End of Year Summary to HMRC for each employee and the P35 Employer Annual Return covering all employees.
  • 31 May - give a P60 to each employee.

Paperless future
Traditionally employers have completed paper P35 and P14s by hand or, more recently, using a CD-ROM and then printing the completed forms and posting them.

However HMRC is keen to encourage online submissions to reduce its costs. Such is its enthusiasm that it has offered a small cash incentive of £75 over the past three years to employers that complete their returns online.

Employers, including larger practices, with 50 or more staff have been required to submit electronically since April 2008. Those employers with fewer than 50 staff must do this from 2010.

For those practices that have not used the electronic return, it may be sensible to start now before it becomes mandatory, and while HMRC is still paying the £75 incentive (tax-free). But practices will need to move quickly to benefit from this as they may need to register for PAYE online before they can electronically send in the forms required by 19 May.

The annual return (P35) covers the tax affairs of your employees. It must include the names of the employees and their national insurance and income tax contributions along with any statutory sick, maternity and paternity payments made.

The P14 form is an individual, personalised record of these payments for each employee. Employers also give each staff member a P60 form. This is a summarised version of the P14 sent to HMRC.

Employers are sent a CD-ROM by HMRC to help them complete the returns and further advice is available from the HMRC website and/or the employer helpline.

Online registration
Registering to file online is done through the employer's section of the HMRC website.

This is straightforward, simply requiring your practice's PAYE and accounts office reference, both of which are on most correspondence you receive from HMRC.

This must be done in advance of any online submission. HMRC suggests at least a week in advance.

After registration an 'activation' PIN will be posted to you. This must be used within 28 days or it will be invalidated. Registration is a one-off process and will not need repeating next year.

For very small practices, simply using the online service through the HMRC website to complete a P14 for each employee and the overall P35 will be adequate.

It is also possible to use most standard accounting software such as Sage and Iris to link to the website for online submissions, although initial registration and an activation PIN are still required.

HMRC provides the stationery for these annual forms free, whereas many of the software suppliers charge for this.

After you have filed your P35 and P14s online, it is possible to simply print off the P60s which you are required to give to your employees by 31 May.

Instead of receiving a cheque from HMRC for the £75 incentive, the practice retains this amount from its next submission of PAYE deductions on behalf of practice employees.

Just in case you feel that you would rather leave filing PAYE forms online until next year, bear in mind that more online filing will be compulsory soon. From 6 April 2009 employers with 50-plus staff have to submit employee starting and leaving forms P45 and P46 online. Under government proposals all employers will be expected to do this from 2011.

As an employer you are bound by tax legislation requiring you to provide the end of year information. Using the HMRC website or helpline can be a great support and I personally have always found HMRC staff to be extremely knowledgeable and helpful.

While there is a small carrot of a financial incentive to file online, there is also the stick of a fine if you are late filing.

  • Dr Phipps is a GP in Lincolnshire
  • More information from HM Revenue & Customs at www.hmrc.gov.uk/employers or call the employer helpline 0845 7143143

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