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P35 Employer Annual Return To File Online

Posted by: edwinsmith on February 22nd, 2010

HM Revenue & Customs (HMRC) are currently reminding employers that their Employer Annual Return (P35 form) for the tax year 2009/10 must be filed online by 19 May 2010. Previously small employers - those with 50 employees or below - were given an incentive to encourage online filing but this has now ceased and paper filing of the P35 form is no long available. So, if you file your P35 form on paper, even if it’s before 19 May, you could receive a penalty.

To file online, employers must register with HMRC’s PAYE Online service if this has not already been done. Smaller employers can then use HMRC’s own free software to file their employee data securely online. However, it is recommended to register early as activation is required before the HMRC filing software can be used. Larger employers can purchase a range of commercial software to file online.

Please contact us if you require further information or assistance with filing online as we can file online on your behalf.  Alternatively visit the HMRC website or review the HMRC’s Employer CD-ROM, which is being sent to all employers.

Filed under: PAYE

Incorrect Tax Coding Notices

Posted by: edwinsmith on February 17th, 2010

A transfer to a new system at HM Revenue & Customs (HMRC) has caused some errors to be made in the issue of some PAYE code notices issued to taxpayers.

The three main errors which have been identified are as follows:

  • a previous employment stopped some time ago but the system has not picked this up and a Coding Notice has been sent for that employment


  • two notices have been sent for the same employment


  • the code BR (basic tax) or DO (higher rate tax) has been given for an employment or pension for the first time.


It is also possible that your tax code could be wrong for other reasons.

Many of these codes will be applied to pensions and employment income from April 2010 and so it is important that the errors are identified and corrected.

Where we receive a copy of a coding notice directly from HMRC, we will be checking this for you and will advise you if an error has been made, however, if you believe that your code is incorrect, then you should contact us.

If you would like to learn more regarding your tax code then more information can be found on the HMRC website.

Filed under: PAYE

Penalties for late PAYE payment to be issued from 2010/2011

Posted by: edwinsmith on February 12th, 2010

From 5 May 2010, the end of the first month in the 2010/2011 tax year, all employers and contractors will be subject to a penalty regime for late payments. Penalties will be charged for late monthly, quarterly or annual payments of:

  • tax
  • National Insurance Contributions
  • Construction Industry Scheme deductions
  • Student Loan deductions.

In year payments and the Class 1A National Insurance payment relating to P11D benefits will need to be made on time and in full. HM Revenue & Customs (HMRC) have confirmed though that one late payment in the tax year will not result in a penalty as long as it is not more than six months late.

Penalties will be worked out on a proportion basis of the amount that is late.  The later the payment the bigger the percentage will be. Please click here for information on the penalties.

Payments can be made in various ways and more information can be found on the HMRC website.

HMRC are issuing PAYE/CIS ‘Paying electronically’ letters in lieu of the yellow Employer Payslip Booklet, for 2010/2011, to encourage more electronic payments. The letter provides the necessary details to pay electronically instead of paying by post with a payslip. However, HMRC have confirmed that you or your accountant can write to the relevant tax office to receive the yellow Employer Payslip Booklet if electronic payments cannot be made. Only large employers, employing over 250 employees, must pay electronically so it is more of a convenience for smaller employers.

Paying electronically provides additional time to make payment. Due dates for payments can be found on the HMRC website.

If no amounts are due for a particular month or quarter a nil payslip should be sent on time, either by post or by using HMRC’s website, to avoid any unnecessary penalties. To do this online you will need your accounts office reference number. To send by post you will need the yellow Employers Payslip Booklet.

If you have any questions or would like to find out more please either contact us or review the penalties information on the HMRC website.

Filed under: PAYE

Tax Amnesty for Doctors and Dentists

Posted by: edwinsmith on February 4th, 2010

HM Revenue & Customs (HMRC) has launched a Tax Health Plan (THP) to offer medical professionals the opportunity to disclose understated income. Since the initial release of the THP, further guidance has been provided by HMRC to state that dentists as well as GMC members are included within the THP.

Intention to notify must be made by 31 March 2010 and then, once registered, disclosure along with payment of tax, interest and penalties must be made by 30 June 2010.

Accountants are able to notify and disclose on behalf of their clients. To notify you will need your GMC registration number and National Insurance number.

HMRC will not calculate your tax, interest or penalties so you or your accountant will need to calculate this. The penalty, to include with your disclosure, is 10% of the underpaid taxes/duties and Class 4 National Insurance unless the unpaid liability is less than £1,000 where there will be no penalty. Interest will be calculated from the date the tax was due to the date of payment. Details of interest rates can be found on the HMRC website by clicking here.

HMRC has stated that they will “pursue those with undeclared tax liabilities who decide not to make a disclosure. In these cases the penalties could be up to 100% of the tax due and in exceptional circumstances criminal investigation may be considered”.

Click here to find out more information on the HMRC website. Alternatively, please contact us and we can assist you.

Filed under: HMRC campaigns, Tax

VAT Returns Online and Electronic Payment

Posted by: edwinsmith on February 1st, 2010

From 1 April 2010, all VAT registered businesses with a turnover of £100,000 or more and all businesses that are newly registered for VAT, whatever their turnover, will have to file their VAT returns online. These affected businesses will also have to pay any VAT due electronically. These changes apply to quarters commencing on or after 1 April 2010.

If you do not have a HM Revenue and Customs (HMRC) online account already for VAT or any other service, you can register on the HMRC website. Please note that you can have one HMRC account to deal with all matters of your business relating to HMRC.

You will be able to file your VAT returns using your HMRC online account or by using your accounting software. A list of the accounting software available for online VAT filing can be found here and select 'XML VAT Return'. Alternatively, we can file your VAT returns on your behalf and inform you of any VAT due. Please contact us if this is would be helpful.

HMRC have confirmed that paper VAT returns will not be sent for those businesses that fall into the above categories. Instead, an email reminder will be sent to you providing that you have registered and confirmed your email address on your HMRC online account for VAT purposes.

The benefit of filing VAT online and paying electronically is that you get additional time to submit your VAT return and pay any VAT due. Please click here to find out more about the additional time to file VAT returns and pay VAT electronically. It is worth noting however, that you will not get any additional time to submit your VAT return if a repayment of VAT is due.

Please contact us if you would like to discuss these changes or if you would like any advice.

Filed under: VAT