P35 filing penalties implemented following monthly trigger

20th June 2013

Taxpayers who failed to file their P35 Employer Annual Return to HM Revenue and Customs (HMRC) before the May 19 deadline and are yet to complete the return will be hit with a £100 late filing penalty this month.
 
Penalties will accrue for each month that a return remains outstanding beyond the May 19 deadline, with the first £100 penalty coming into play this week.
 
Any P35 and P14s returns that remain outstanding for more than four months will see taxpayers handed with a penalty notice shortly after September 19 and again the following January and May, if necessary.
 
These penalty notices will display the amount of penalty that’s building up for late returns. This will be calculated at £100 per 50 employees for each month or part month a return is filed late.
 
This is likely to be the last Employer Annual Return most employers will be required to complete. PAYE in real time – or RTI reporting – began on April 6 2013.
 
Employers who began operating PAYE in real time during the 2012-13 tax year are not required to file an Employer Annual Return (forms P35 and P14s); nor must they notify HMRC that they have no return to make.
 
Instead, employers should notify HMRC that this is the final submission for the tax year using a Full Payment Submission (FPS) or an Employer Payment Summary (EPS).
 
Almost all employers are expected to file their P35 and P14s forms online. The only exemptions are:

  • Employers entitled to operate PAYE using the Simplified Deduction Scheme up to 2013 for personal and domestic employees.

  • Employers who have a notification from HMRC that they are exempt from online filing. Note: If you think you qualify on the grounds of your religious beliefs or you employ a carer but have not yet applied for an exemption read this further guidance from HMRC.

Limited companies filing a return solely to report ‘Construction Industry Scheme (CIS) deductions suffered’. However, these returns can also be filed online and should be submitted as a complete return – P35 with no P14s.

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