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Understanding and using PAYE Online for employers

There’s a wide range of PAYE (Pay As You Earn) notices, forms and returns that can be sent and received online. It’s a fast, convenient and secure way of exchanging information with us. It cuts down on time, admin and errors, and it means that you’ll get up-to-date PAYE information, such as employee tax codes, almost instantly from us.

This guide tells you how to get started with PAYE Online. It explains the different ways you can file online and how the free filing service on our website works. It also goes through the steps involved in filing (and amending) your Employer Annual Return online.

On this page:

The different ways of filing online

There are a number of PAYE online filing options you can choose from. You can use:

  • the free ‘Online Return and Forms – PAYE’ service on our website
  • a commercial software package with an online filing function
  • Electronic Data Interchange (EDI), which is suited to very large employers
  • a payroll agent or bureau, who will file on your behalf

You are not restricted to using just one of these options. For example, when submitting your Employer Annual Return you could have an agent file your forms P14 at the end of the tax year but file form P35 yourself using our online service.

For the tax year 2007-08 you can also use our free P11 Calculator tool as part of the online filing process. Employers who have nine or fewer employees at the end of the tax year can use the P11 Calculator to file their Employer Annual Return - forms P14 and P35 - online.

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The registration process for PAYE online filing

If you want to file online using either our free online service or commercial software, you will need to register with us and activate your service within 28 days of receiving a Personal Identification Number (PIN) from us. The steps involved in registration are explained in another of our guides – see the link at the end of this section.

There is a separate registration process if you plan to file PAYE forms using EDI. This is explained in another of our guides – see below. An important part of EDI registration involves making sure that you have the necessary software and communications links for the system to work.

If you want to file online using an agent or payroll bureau, then it will be up to the agent or bureau to ensure that they are registered with us. Bear in mind, though, that you will still need to register with us if you want to handle any of your other PAYE tasks online, such as receiving your tax coding notices.

Details of how to register for our PAYE Online Service

Take me to the Online Services homepage to start the registration process

More about EDI filing for large employers

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PAYE tasks you can, can’t and must complete online

You can send many of your PAYE forms and returns to us online. To see a full list, use the link at the end of this paragraph. The next two sub-sections deal with forms and returns that either must be filed online or can’t be filed online.

A full list of the PAYE forms you can send or receive online

Employer deadlines for mandatory PAYE Online filing

We are gradually making it compulsory for all employers to file a number of key PAYE returns and forms online.

If you have 50 or more employees, you must already file your Employer Annual Return - forms P14 and P35 - online. If you have fewer than 50 employees, you do not have to file online until at least 2010 but you can get tax-free payments for filing online before then.

There are separate deadlines for sending forms P45 Part 1, P45 Part 3, P46 and P46 (Pen) online. The last of these is a new pensions-related form, to be introduced in 2009, which replaces forms P160 and PENNOT Employers with 50 or more employees must start filing these online from 6 April 2009, and we expect employers with fewer than 50 employees to have to file these forms online from 6 April 2011.

More about employer deadlines for filing PAYE online

Forms and returns that can’t be sent to us online

There are a number of forms and returns that you cannot file online:

  • amended forms P38A, P11D or P11D(b)
  • more than five P11Ds without National Insurance Numbers on them or 5 per cent of your total submission if it includes more than 100 forms.
  • additional forms, such as SC60s or CIS25s

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The computer equipment you need to file online

The main requirement for online filing is access to a computer with an Internet connection. This applies whether you’re using the free online filing service on our website or a commercial payroll software package. EDI filing has much more demanding technical requirements, which are outlined in a separate guide.

If you use our free online filing service, then you do not need any further software to file online. If you use commercial software, you should check that it permits online filing. You can use the link below to see a list of the commercial software that we have successfully tested.

Bear in mind that if you are using our free online filing service you must be connected to the Internet continuously while filling in your forms and while sending them to us. Some commercial software is more flexible on this point, allowing you to fill in your forms while you’re offline and then file them to us when you go online.

List of payroll software packages we have tested for online filing

List of software that meets our broader payroll standard

More about EDI filing for large employers - including technical requirements

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Viewing the notices and reminders we send you online

When you register and activate the PAYE Online service, we will automatically start sending PAYE notices and reminders, such as forms P6 and P9, to you online. To access these, log on to the service using your User ID and password and select one of the following options:

  • tax code notices
  • student loan notices
  • employer notices
  • notices issued for tax years to 5 April 2008

If you provide an email address to the PAYE Online service, we can notify you each time a PAYE notice or reminder has been sent to you.

More about receiving PAYE notices and reminders online

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Filing your Employer Annual Return - forms P35 and P14 - online

If you have 50 or more employees, you must file your Employer Annual Return - forms P14 and P35 - online. If you have fewer than 50 employers, you do not have to file online until at least 2010 but you can get tax-free payments for filing online before then.

Your Employer Annual Return must be filed by 19 May after the tax year to which the return applies or you may face a penalty.

Filing using our free ‘Online Return and Forms – PAYE’ service

When filing P14s, your first step is to enter some basic information about your employees into a database. This just involves typing in details such as their addresses and National Insurance numbers. Once you have entered an employee’s details, they’ll automatically be transferred to any form relating to the employee that you file with us, including forms in subsequent tax years.

Once you’ve set up this database, you next need to complete your P14s using details of your employees’ pay and tax/National Insurance contributions (NICs) deductions from your other records. Our online filing service does not calculate these figures for you, but we have a range of calculators on our website and Employer CD-Rom that do.

If you use the integrated P11 Calculator tool on our Employer CD-Rom, it will automatically calculate these end of year figures for you. And if you have nine or fewer P11s to process, you can use the P11 Calculator to file online directly.

If you are using our ‘Online Return and Forms – PAYE’ service to file only the P35 element of your return, you do not need to set up the employee database. However, if you use the service to complete and file your P14s it will automatically produce a completed P35 for you to file.

Filing using commercial payroll software

You should consult the instructions accompanying your software package for details of how to file your Employer Annual Return.

What we’ll do when we receive your Employer Annual Return

As soon as we receive your return online, our system will check it against our Quality Standard and let you know - usually within a minute, but allow up to five - whether we have accepted it or rejected it.

Our free ‘Online Return and Forms – PAYE’ service, as well as many commercial software packages, are built around the Quality Standard, so in most cases any errors in your return will have been highlighted and corrected before you file.

See the section further down this guide for details of common online filing errors to watch out for.

If you need to amend your return after filing it

If after filing your return you discover it contained an error, you must inform us, either online or on paper. You will need to send us an amendment, as well as an explanation of why the error occurred.

Your amendment should only show the difference (plus or minus) between the figure on your original return and the correct figure. For example, if one of your P14s showed £100 too little tax you must send us an amended P14 showing ‘+100’ to correct the error.

If you amend any P14s, you must also send an amended P35, even if the figures on the P35 have not changed.

If you have no return to make

If you do not need to make an Employer Annual Return, because you haven’t had to complete a form P11 for any of your employees during the year, you must tell us in writing or by phone. This will help us to update our records and make sure that we do not issue you with a penalty charge for failing to file. You cannot inform us online.

Choosing the right payroll system for your business

More about completing the Employer Annual Return – forms P14 and P35

More about using the Employer CD-Rom P11 calculator

More about filing your 2007-08 Employer Annual Return online

Guidance on filing form P35 and P14s separately

More about filing your 2007-08 Employer Annual Return from the Employer CD-Rom

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Filing online during the tax year

We are gradually making it compulsory to file the following in-year PAYE forms online:

  • Form P45 Part 1 - when an employee leaves your business
  • Form P45 Part 3 - when a new employee starts
  • Form P46 - when an employee starts but has no P45 from previous employment
  • Form P46 (Pen) – this will replace forms P160 and PENNOT in April 2009, for sending us details of a new pension or annuity that you’re starting to pay

Employers with 50 or more employees must start filing these forms online from 6 April 2009, and we expect employers with fewer than 50 employees to have to file them online from 6 April 2011.

From April 2009 all employers, whether filing online or using paper forms, will have to include employees’ gender and date of birth on the four forms listed above. You should check what details you already have and start to fill in any gaps.

If you are using commercial payroll software to file online, consult the accompanying instructions for details of the steps to take.

If you are using the free online filing service on our website, it will take you through the steps involved in filing in-year forms such as P45s and P46s. If you use our online service to enter an employee’s basic details, such as name and National Insurance number, into a database, then this information will automatically transfer to any form you create for the employee.

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Avoiding common errors when filing online

Make every effort to avoid mistakes when you’re filing your forms and returns online. Employer Annual Returns containing errors will be rejected, and you’ll face a penalty charge if you do not file a corrected return by the 19 May deadline.

The following is a list of common errors to watch out for and avoid:

  • missing National Insurance numbers
  • using temporary National Insurance numbers - TN plus the employee’s date of birth – is no longer accepted
  • incorrect format for tax codes – watch for tax codes 0T and D0, which use the number zero, not the letter o
  • using the informal tax code NI for students working during their holidays to show that no tax is being deducted – NI is not a valid tax code and if it’s included on your Employer Annual Return or on a form P45, we will reject them. Leave the tax code field blank instead
  • incorrect PAYE reference format – it should be the three-digit HMRC office number followed by your employer’s reference. For example, 913/WZ51258
  • leading spaces on names and addresses – make sure that you don’t include a space or a comma, full stop or apostrophe, before the first letter of any names and addresses you’re entering
  • filing on paper as well as online – you must only file forms and returns once
  • filing a second form P45 Part 1 if you make a payment to an employee after they leave – use the link below to our guide about employees leaving
  • sending us a form P45 Part 3 with an incorrect PAYE reference number for the employee’s previous employer – if the number is illegible, then when entering the details online use the following default PAYE reference: 001/XXX

More about paying an employee after they have left or retired

Take me straight to the Online Services homepage

More about avoiding common errors when filing your Employer Annual Return

More Useful Links

More about our Payroll Standard benchmark for commercial payroll software

Details of how to register for our PAYE online service

More about filing your 2007-08 Employer Annual Return online

A full list of the PAYE forms you can send and receive online

More about employer deadlines and tax-free payments for online filing

Telephone and face-to-face help with online filing

Attend one of our online filing workshops

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