Online filing 2006
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If you had fewer than 50 employees in November 2004 and sent your 2005-06 Employer's Annual Return online, you can get your £250 straight away simply by deducting it from your next PAYE payment to us.
If you are one of the few employers who cannot get your £250 this way, you will need to wait until we have sent you an online notice confirming that we have credited £250 to your PAYE account. You can then claim a cheque payment from us.
The majority of tax-free payment online notices have now been issued and can be viewed using the PAYE DPS service.
If you want us to send you email alerts when you have new notices and reminders to deal with, you must use the link ‘provide us with an email address’ on your PAYE service page. You must do this even if you did this at registration or got email alerts in 2005/06.
2005-06 common errors
Using temporary National Insurance numbers is one of the most common mistakes some of you are making when filing online this year. Do check out common errors before you send your Return.
Online filing 2006
- Do you have to file online?
- Is your Employer’s Annual Return really necessary?
- Sending your Return
- Agents and paper P35s
- Using the correct authentication details
- Register early!
- Replacement passwords
- New tax-free payment box on the 2005-06 P35
- Testing times
- Online Return and forms
- Checking consolidation and accounting totals
- What happens when we get your Return
- Sending Returns in parts
- How we deal with part Returns
- Sending supplementary or amended information
- £250 tax-free!
- Tax-free payment confirmation 'letters'
- Accounting for the tax-free payments
- Cessation Returns
- Penalties
- Get more help
- Check online service availability
Do you have to file online?
If you had 50 or more employees when we wrote to you in November 2004 you must send us your 2005-06 Employer's Annual Return (P14s and P35) online, or you will get a penalty.
You will get £250 tax-free if you had fewer than 50 employees when we wrote to you in November 2004 and you file your 2005-06 Employer's Annual Return online.
Your HMRC office can tell you if you have to send your Return online if you are not sure.
Is your Employer’s Annual Return really necessary?
You must only send us an Employer’s Annual Return when you are required under the PAYE Regulations to fill in at least one Deductions Working Sheet (P11 or equivalent).
If you have not filled in at least one P11 you should not send us a Return.
You must tell us by 19 May 2006 if you do not need to send a Return by:
- telephone, or
- letter.
This will help us make sure that we do not send you a penalty notice for not sending your Return. You cannot tell us online.
You may have to send us a P35 where you have nothing to report in the 'accounting' boxes, but you still have to send us P14s. For example, where all your employees are paid at or above the Lower Earnings Limit for National Insurance (£82 per week or £356 per month in 2005-06), but below the National Insurance Earnings Threshold.
If you are a limited company and you need to report an amount in the ‘CIS deductions suffered’ box we will need a P35 from you, even though all the other accounting boxes on the form are ‘nil’.
Sending your Return
Send your Return as soon as you can. And because our online services will be very busy, you might find it easier to send your Return outside of office hours or at weekends. Or, if your software lets you, set it to send your Return overnight.
To help us keep the system running smoothly, we recommend you send your Return if it is ready and not send a test submission. But if you send a test, remember to take the test flag off before sending your Return for ‘real’.
Your Return will be checked when you send it to us. If your Return is rejected we will tell you why. You must correct and re-send your Return by 19 May.
Your 2005-06 Return must pass all of our quality checks when you send it. Otherwise we will reject it and you will have to correct any errors and re-send it as soon as possible, and no later than by 19 May to avoid a penalty. So make sure that you do not make any of last year's most common errors.
You must only make one complete and accurate Return and you cannot replace your complete Return once we have sent you the following message
‘9004: The EOY Return has been processed and passed full validation.’ 'Your software may interpret this message differently, so check with your software provider if you are not sure.
Do not send a paper P35 as well, once you have sent your Return online. We might process the paper Return first and you might get a penalty notice for not sending your Return online, or not get your online filing tax-free payment.
Agents and paper P35s
We have had requests from agents for blank paper 2005-06 P35s, when all their clients filed their Employer's Annual Returns online last year. Agents are using these P35s for their own internal audit purposes. They ask their clients to sign the paper P35 and give agreement to the details before sending the online Return.
Both parties need to keep a record of the agreement to the details, but it does not need to be on a form P35, it can, for example, be an online confirmation.
If your agent is sending an online Return for you, you do not also need to send us a signed paper P35 confirming your agreement to the details. A blank P35 is available. While it is marked 'specimen', it will meet the audit requirement.'
Using the correct authentication details
We cannot accept your 2005-06 Return online if you do not use the right authentication details when you send your Return. Not using the right information was the biggest cause for Returns failing in 2004-05.
You cannot test your authentication details when the 'test in live' service is unavailable.
Register early!
You must register and activate our PAYE Online for Employers - Internet service before you can send your Return online over the Internet. And you need to do it in plenty of time to get your Return in by the filing deadline. You cannot file your Return online using the Internet until you register and activate the service.
Replacement passwords
If you need replacement User ID or Password contact the Online Service Helpdesk now because it can take up to seven days to come through.
New tax-free payment box on the 2005-06 P35
If you had a 2004-05 tax-free payment for online filing you need to show this in a new box on the 2005-06 P35.
These examples show you how to complete this box.
Testing times
If you use third party software you can test all or part of your Return by sending a ‘test in live’ file (if your software lets you set a test flag).
When you send a test Return you will get an email from the Government Gateway saying ‘The submission for reference < Employer PAYE Reference > was successfully received on <date> and is being processed’. You will then get a message from us through your software which says ‘9001: This submission would have been successfully processed if sent under non test conditions.’ This means that we will not treat what you send as your final Return.
If you do send a test Return, you must remove the test flag before you send
your Return for real.
Online Return and forms
If you use Online Return and Forms – PAYE, make sure that you have the correct User ID and Password (PDF 447K). If you have, you will see your PAYE reference on screen after you successfully log on. The PAYE reference will be automatically carried forward to your P35.
Checking consolidation and accounting totals
If you send your Return in parts over the Internet, we will not be sure that the P14s add up to the accounting totals on the P35 until we pull all the parts together. There will be no way for employers to test if the P14 parts and P35 agree for 2006.
What happens when we get your Return
Both the Government Gateway and HMRC check your Return when you send it.
Checks by the Government Gateway
You will get an e-mail message from the UK Government Gateway saying that we have received your submission. The message will say:
‘The submission for reference < Employer's PAYE Reference > was successfully received on <date> and is being processed’.
This message is NOT confirmation that your Return is correct, it is issued to confirm that we have received your submission. You must wait for the HMRC acceptance message, (below), for confirmation that your Return has been accepted or rejected.
If your Return is rejected by the Gateway, you will get the following message
‘The submission for reference < Employer's PAYE Reference > was received on <date>. Unfortunately it could not be accepted as it failed HMRC data checks.’
Checks by HMRC
After we have received your Return at the Gateway, we will then check whole Returns (that is, all the P14s and the P35 sent at the same time) against our Quality Standard, and will send you an online message saying:
‘The EOY Return has been processed and passed full validation’.Your software may interpret this message differently, so check with your software provider if you are not sure.
If your Return does not get meet the Quality Standard you get a message telling you the reason why your Return failed and give you an error code. You can find details of all the errors. If you cannot find an answer there, please talk to your software provider before contacting the Online Services Helpdesk. You must put right any errors and re-send the Return by 19 May to avoid a late filing penalty.
In most cases we will send these message within a minute, although it will be longer for larger Returns (up to 5 minutes). Please do not attempt to re-send a Return while you are waiting for an acceptance message.
The Online Service Helpdesk is the contact point for the technical queries about connections to online services and validation queries arising from Returns, and for with our Online Return & Forms – PAYE
General PAYE enquiries must still be directed to the Employer’s Helpline.
Sending Returns in parts
If you want to send your online Return in more than one part (P14s and P35 sent separately) make sure that you avoid last year's most common errors.
Some employers are sending more than one complete Return (P14s and P35) for the same PAYE reference believing that they are sending their Return in parts. For example, you might operate separate payrolls for different branches of your organisation under one PAYE reference, but send P14s and a P35 for each branch.
You must only send one P35 for your PAYE reference and you must only send your Return in parts (P14s and P35 separately) if your software lets you.
So you must check with your software provider that you can send your Return in parts before you attempt to do so. If you send a P35 with each batch of P14s, we will treat the first P14 and P35 submission as your 2005-06 Return and reject any later Returns
How we deal with part Returns
We will check each P14 part when we get it and any acceptance or rejection message will be sent, in most cases, within a minute. You will also get an email from t he UK Government Gateway saying that we have received your submission. We strongly recommend that the P35 is the last item you send.
Once a P14 part has been checked, we will hold it until all the parts for that Return have been sent. Each part must have a Unique Identifier and you can replace a part at any point up to when we accept the P35. Replacement parts must show the same Unique Identifier as the original part.
We cannot complete our final quality checks until later in April when all the P14 parts are married up to the P35 and all the financial totals cross-checked. We cannot tell you that we have accepted the whole Return, so you must check to see that you get an acceptance message for each part that you send. We will contact to you during May and June if your Return has failed these final quality checks.
The online filing tax-free payment will only be credited to your PAYE payment record when your whole Return has been processed to our other systems.
Sending supplementary or amended information
You must send an amendment if you need to change any of the information on your Return. If you need to change or add to your Return you must:
- send amended P14 and P35 details showing only the difference between the original figure and what it should be, and
- send a letter to your HMRC office saying why your Return was not full and complete in the first place.
We treat a whole Return as your complete Return for that year. Sending amended information means that your original Return was not full and complete and you may be charged a penalty.
Amendments do not have to be sent in the same way as the original Return (Internet, Electronic Data Interchange, magnetic media or paper). For example, you could send amendments using our free Online Return and Forms - PAYE product.
If you need a duplicate or additional P35 to send amended information, contact your HMRC office. You can get P14s from the Employer's Orderline.
£250 tax-free!
You will get £250 tax-free if you had fewer than 50 employees in November 2004 and you send your 2005-06 Employer's Annual Return online. If your Return is sent online and passes our quality checks, we will process it to your PAYE payment record and then tell you that £250 has been credited to your account.
Tax-free payment confirmation 'letters'
If you have registered and activated PAYE Online for Employers – Internet, we will send an online notification telling you that we have credited the £250 tax-free payment, even if you do not normally get in-year notices (for example P6s) online.
If you use a payroll agent, and have given us authority to send information to them online, your online 'letter' will go to them. Online ‘letters’ will be available through our Data Provisioning Service to view from your (or your agent’s) PAYE service page.
We will only send a letter on paper if:
- you have not registered for PAYE Online for Employers - Internet or,
- you have de-activated PAYE Online for Employers - Internet or,
- you have not authorised your agent to get information on your behalf and you have also not registered to use PAYE Online for Employers - Internet.
Paper letters started going out from mid-May.
(From 6 April, all remaining 2004-05 tax-free payment letters will be sent on paper.)
How to get your £250
The quickest and easiest way that most of you can get your tax-free payment is to 'self-serve' by deducting £250 from your next PAYE payment(s) to us for 2006-07. You can ‘self-serve’ as soon as you get the following message for your complete Return:
‘9004:The EOY Return has been processed and passed full validation.’ Your software may interpret this message differently, so check with your software provider if you are not sure.
Please ignore the tax-free payment letter if you self-serve before you get your notification.
We recommend that you send a 'nil' PAYE payslip for any complete month(s) or quarter(s) covered by the tax-free payment. We will not then send you a reminder for that period.
Your online 'letter' will tell you how to get a cheque payment from the Accounts Office if you cannot 'self-serve' the tax-free payment. Please do not contact the Accounts Office until you receive your letter.
Accounting for the tax-free payments
We recommend that you show the tax-free payments in your financial accounts as 'other operating income'. The payments are not taxable (wherever you show it), so your Self Assessment or Corporation Tax computations should show profit reduced by the payments included in your accounts.
Tax-free payments and VAT
You do not have to pay VAT on your tax-free payments for early online filing, nor do you have to show them on your VAT Return.
Cessation Returns
Returns for PAYE references that have ceased during 2005-06 will be held until the end of June before we carry out all the quality checks. That means we will not be able to confirm if a tax-free payment has been credited until July.
Penalties
Late filing penalty
Extra Statutory Concession B46 allows you up to seven more business days after the Employer's Annual Return filing deadline of 19 May to send your Return before we start to calculate a late filing penalty. This concession allows for postal delays and problems with Internet connections, including delays and occasional slow services experienced. Due to Bank Holidays, we will not charge a 2005-06 late filing penalty if we have your Return by midnight on 29 May 2006.
If you are a small employer, you will still get your tax-free payment if you send your Return online after 29 May, but you may be charged the late filing penalty.
Online filing penalty
You have to send your 2005-06 Return online if you have 50 or more employees. You will incur an online filing penalty if you send any part of your Return on paper or by magnetic media.
