Mandatory Online Filing of Year-End Returns – Regulations to extend online filing requirements to small employers

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In April 2009, HMRC published for consultation draft amendment regulations that would extend the mandatory filing of year-end returns to small employers. Two sets of Regulations have now completed their Parliamentary procedures and come into force from 13 August 2009 (although most of the provisions are effective from 6 April 2010). They make the necessary changes to the PAYE Regulations and the Social Security Contributions Regulations.

The following notes update the review of the changes that we published in April. The differences are highlighted in italics.

• Online filing is not mandatory for “small” employers for the 2009/10 tax year who cease paying PAYE tax during that tax year and submit their year-end P14 and P35 returns before 6 April 2010.
• A distinction continues to be drawn between “small” employers, to whom no e-filing notice is sent each year, and “large” and “medium-sized” employers, who are sent an e-filing notice in advance of each new tax year.
• Mandatory filing of P14 and P35 returns will not apply to
  • a member of a religious society or order whose beliefs are incompatible with the use of electronic communications, or a partnership or company where all of the partners or all of the directors and company secretary have those beliefs,
  • an employer who is authorised to use the simplified PAYE deduction scheme and who has not received an incentive payment, or
  • a “care and support” employer , i.e. an individual who employs a person to provide domestic or personal services in the employer’s home, and
    • the services are provided to the employer or a member of the employer’s family,
    • the recipient of the services is physically or mentally disabled, or is elderly or infirm,
    • the employer has not received an incentive payment in respect of the last 3 tax years, and
    • it is the employer who delivers to annual returns and not someone acting on the employer’s behalf.
• The penalties set for “small” employers for not filing P14 and P35 returns online depend on the number of employees for whom particulars should have been included with the annual return:
  • for the 2009/10 tax year, the penalties are
    • 1 to 5 employees – £nil
    • 6 to 49 employees – £100
  • for the 2010/11 and subsequent tax years, the penalties are
    • 1 to 5 employees – £100
    • 6 to 49 employees – £300.

Equivalent changes are also made to Regulations 90M to 90P of the Social Security (Contributions) Regulations 2001.

Further information:
Summary of Responses: Mandation of Online Filing
The Social Security (Contributions) (Amendment No. 4) Regulations 2009
The Income Tax (Pay As You Earn) (Amendment No. 2) Regulations 2009
Explanatory Memorandum

This entry was posted on Wednesday, July 29th, 2009 at 05:00 and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.