Employers Bulletin Issue 19 - February 2005

Contents

 

Welcome

Here’s another packed issue full of the latest news and developments on the payroll front.

Much of this issue is dedicated to helping you with the tasks you need to do before the end of this tax year, such as preparing your Employer’s Annual Returns. And we’ve an Online Filing 4 page supplement to help you with any questions you might have in the run up to the 19th May deadline. Our advice to you would be to file online as soon as you can after the 6th April!

We’ve worked closely with other Government Departments to bring you the latest news on Statutory Maternity Pay, including changes the Chancellor announced in his Pre Budget Report, and on Attachment of Earnings Orders. And we have a short article on something we’ve never covered in Employer’s Bulletin before – Gender Recognition and its effect on payroll.

You’ll also notice a reminder on the importance of appealing against any incorrect Default Notices. If you have 250 or more employees this could apply to you.

As always if you have any feedback on this issue of Bulletin why not email it to the web address shown on the opposite page. Your comments are important and help us to make sure that your Bulletin comes to you with useful, relevant and constructive articles to make your life easier. Feedback helps us to help you!

Our next issue of Bulletin should be with you shortly after the Budget.

Don Macarthur
Employer Programme Director

Remember to make your tax code change

You need to update your employee’s tax codes before the first pay-day of the new tax year. Use the instructions on the P9X form on the enclosed CD ROM.
You can also get a copy of the P9X from the Orderline

Moving to the new financial year 2005-06

You can file your 2004-05 Return from Wednesday 6 April 2005 onwards. If you want to calculate and pay wages by Friday 8 April, before you file the Return, you must make sure that your payroll software will allow you to start work on the 2005-06 payroll before the 2004-05 year is finished. Your software provider will tell you if it can. The Revenue understands that some software companies are updatingtheir software product so that it will help you move to the new financial year before the old one (2004-05) is finished and the Return sent. Generally, software companies will suggest an IT solution upon request.

Tax VANishes

New rules for taxing employees on their use of company vans are being introduced.

From 6 April onwards employees will have no tax to pay if:

  • the only journeys made in the van are work journeys (for example, delivering goods or making calls to customers) or
  • all the journeys are work journeys and travelling between home and work.

Employees will only pay tax if they use their van for private journeys other than travelling between home to work, unless this other private use is insignificant. For example, taking rubbish to the tip once or twice a year, or regularly making a slight detour to stop at a newsagent on the way to work.

If there is tax to pay because of private use, employees will be charged tax on the following amounts:

2005-06 £500
reduced to £350 if the van is over
4 years old
2006-07 £500
2007-08 £3000 with tax on an extra £500 if they have free
or subsidised fuel for private use.

Employers will pay Class 1A NICs on the same amounts.

If your employees are affected by these changes please get in touch so we can change their tax codes to make sure they pay the right amount of tax.

See our Vans pages for more information.

Gym and tonic

There is no longer a possible benefits charge on employees who use recreational facilities or are provided with free or subsidised meals on the premises of another employer.

Technically, there could have been a benefits charge where an employee was provided with a free or subsidised meal, or sports facilities, on the premises of another employer. For example, where employees of more than one employer work at the same site and share the same recreational or meal facilities but the facilities are provided by one employer. After representations we have made changes that remove the possible charge.

Now, where an employer provides free or subsidised meals or recreational facilities that are exempt for
their own employees, they are also exempt for the employees of other employers who work on the same
site and use the same facilities.

More information on this can be found in the Employment Income Manual

Pensions Advice

You can now provide information and advice about pensions to your employees and they will not be taxed
on it. Most pensions information and advice provided by employers is unlikely to give rise to an employee benefits charge. But where an employer paid outside consultancy fees for seminars or for one to one sessions on financial advice for employees, tax could have been charged on the employees.

New Regulations which came into effect on 14 December 2004 will mean that no tax will be due provided that the information and advice is: about pensions.

  • It must not be general financial or tax advice
  • available to all employees
  • worth no more than £150 per employee per year.

Find out more about this

Attachment of Earnings

A new fines-enforcement scheme is being piloted so you might receive more Attachment of Earnings orders (AEOs).

AEOs are issued by the courts, and they tell you to take money from an employee’s pay to cover an
unpaid debt. These debts could be for maintenance, fines or civil court judgement debts.

As a result of the Courts Act 2003, a new scheme has been developed that widens the use of AEOs to collect more unpaid fines.

In the pilot scheme the new AEOs do not use ‘Normal Deduction Rate’ and ‘Protected Earnings Rate’. They use a fixed percentage table of deductions like that used for Council Tax deductions.

National rollout of the scheme will take place in April 2005 when it is expected that more AEOs will be issued.

The Department for Constitutional Affairs has issued an Employer’s Guide to AEOs which explains how to comply with an AEO, and how the new fixed tables work. Copies can be obtained from local Magistrates’ Courts and from the Court Service Website.

If you have a query about a particular order, you should contact the court which made the AEO, quoting the case or reference number.

Student Loans and Scottish Debt Arrangement Schemes

Income related student loans will not be included in the debts covered by the new Scottish Debt Arrangement Scheme (DAS). So, if you are collecting Student Loans deductions and you receive instructions under a Scottish DAS you should continue as before and look at booklet E17 Collection Of Student Loans – An employer’s guide to collection of student loans.

Student Loans

The annual threshold for the collection of Student Loans is being increased from April 2005. This is relevant to any employers who have received either an SL1 or a P45 with a 'Y' in the 'Continue Student Loan
Deductions' box for an employee.

Currently if an employee earns below £10,000 per annum no Student Loan deductions are made. This threshold is increased to £15,000 from 6 April 2005 and applies to all payments for both existing and new borrowers.

Revised deduction tables (SL3) and a Student Loan deductions calculator are on the Employers CD ROM. Paper copies of the tables are available from the Employer’s Orderline.

Tax credits and the Scottish Debt Arrangement Scheme (DAS)

Tax credits cannot under any circumstances be assigned. So employees may not assign any part of their Working Tax Credit to repay a debt under the new Scottish DAS. If an employee instructs you to deduct
an amount from his net pay under a DAS, you must deduct the specified sum from the employee’s net earnings only and not from any Working Tax Credit that you may be paying him through the payroll. Always pay the full amount of Working Tax Credit we have told you to pay.

The Scottish Executive is amending its guidance to Money Advisers to make clear that, in calculating surplus income and the amount to be the subject of a payment mandate, Working Tax Credit must not be included.

Employer Childcare

The tax and NICs rules for employer-supported childcare are changing on 6 April 2005 to offer a better incentive for employers to help their employees with their childcare responsibilities.

Employers who already offer benefits, such as childcare vouchers in particular, need to be aware of these changes.

Further information is available in Helpbook E18 (2005) How you can help your employees with childcare on the enclosed CD ROM. This has more information about the tax and NICs treatment of workplace nurseries, childcare vouchers and other childcare provision.

You can also find information on our Childcare pages or you can phone the Employer’s Helpline.

Vouchers

The costs of running a childcare voucher scheme will no longer have to be included in the tax calculation of an employee’s benefit-in-kind. The 2004 Finance Act introduced a new tax exemption for employer-provided childcare vouchers. From 6 April 2005, employees can receive from their employers vouchers for childcare worth up to £50 a week and there will be no tax or NICs charge.

Currently when childcare vouchers are valued for tax purposes the employer’s costs of running the scheme have to be taken into account. The Chancellor announced in his Pre Budget Report that the costs of running the voucher scheme can be excluded from this calculation from 6 April 2005. So a childcare voucher with a face value of £50 will be fully exempt from tax and NIC.

From here to Maternity

If a pay rise is awarded that would affect a woman who is on maternity leave, or is about to start maternity leave, her Statutory Maternity Pay (SMP) must be altered. You need to increase the earnings-related part (which is 6 weeks for most women but for some will be 26 weeks) to take account of that
pay rise.

From 6 April 2005 SMP rules will change to bring them in line with a European Court of Justice (ECJ)
judgement given on 30 March 2004. Currently you only need to re-calculate SMP if a backdated pay rise increases the earnings in the ‘set period’. This is the period you have used to calculate the woman’s average weekly earnings.

From April you may have to re-calculate the average weekly earnings depending on where the effective date of the pay rise falls. If it falls between the start of the original set period and the end of the maternity leave (either ordinary or additional maternity leave) you must re-calculate it.

You must also recalculate if the effective date is before the start of the set period but the earnings used in the original calculation had not been adjusted to reflect that pay rise.

You can find out more about this in the E15 Employer’s Helpbook Supplement for 2005 and from the Employer’s Helpline 0845 7 143 143.

An important point to note is that although the UK legislation is effective from 6 April 2005 the change is as
a result of a ECJ ruling and this may operate retrospectively. The case returns to the UK Court of Appeal in February 2005 and no advice can be given on the effect of the ECJ’s judgement on past periods until the
Court of Appeal has given its decision.

Statutory Payments

In his Pre Budget Report (PBR) the Chancellor announced an extension to paid maternity leave as a first step towards a year’s paid leave. He said that SMP, Statutory Adoption Pay (SAP) and Maternity Allowance will be extended to 39 weeks from April 2007. Mothers who take advantage of this extension will gain up to £1,378. The rates for SMP and Statutory Sick Pay were increased in the PBR. You can use the calculators on the enclosed Employer’s CD ROM to make your calculations for you. The rates for SAP have also been increased. You can use Helpbooks E14, E15 and E16, which are available on the CD ROM or from the
Orderline.

The rules about occupational pension contributions for employees on paternity or adoption leave are
changing from 6 April 2005. The new rules bring the treatment of contributions for fathers and adopters
into line with the rules for women on maternity leave. More detailed information is available at the DTI’s Working Parents website

Employer's CD ROM

Your Employer’s CD ROM

New to this CD ROM:

  • Statutory Sick Pay (SSP) calculator
  • Statutory Maternity Pay calculator
  • Student Loan deductions calculator
  • 2 & 4 weekly calculator for National Insurance Contributions
  • 'Teach Yourself…' Packages for:
    • SSP
    • Paying Working Tax Credit
    • Student Loan deductions
    • PAYE Online
  • A New Employer's section including:
    • What you need to know
    • Getting Started
    • Jargon Buster
  • A larger Online Services section with:
    • an overview of online services
    • the ‘Get Real’ online filing video
    • the improved Online filing handbook

We’ve also made a number of changes based on your suggestions for improvement. Some changes we couldn’t make, and some take longer so are still in the pipeline. Listed below are some of the changes we
have made.

You said:
As a result:
I don’t like the sound effects We’ve taken them off
The drop-down menus are too sensitive We’ve adjusted them to be less reactive
I want a P60 form We’ve added an interactive P60
Where do I get a form, if I can’t download it? We’ve added a comprehensive list of forms
with details of how to get forms that aren’t
on the CD ROM
I need a “Talking” CD ROM as I have eyesight problems There is now a version of the CD ROM
which is compatible with leading speech
output software

 

EmployerTalk 2005

EmployerTalk gives you a chance to meet Revenue specialists face-to- face and listen to key speakers talk about important, current issues.

These events are free of charge, but by invitation only as capacity at each venue is limited.
You can find out contact details or book a place by visiting the EmployerTalk pages.
or ring Sam French on 0845 366 7878

Dates City/Town Venue
3 March London Barbican Centre
15 March (am only) Chester Moat House Hotel
16 March (am only) Blackpool Hilton Hotel
17 March Bolton Reebok Stadium
5 April Durham Ramside Hall Hotel
7 April Harrogate Cairn Hotel
19 April Birmingham National Motorcycle Museum
4 May Cardiff City Hall
25 May Edinburgh Assembly Rooms
8 June Belfast Belfast
5 July Brighton Brighton Dome
7 July Newbury Newbury Racecourse
22 September Exeter Exeter University
5 October Nottingham East Midlands Conference Centre


Good news for BACS Direct Credit users

If you pay by BACS Direct Credit you will soon be able to make one payment to cover both your tax and NIC.

You can make one BACS Direct Credit payment for your current monthly or quarterly payment from May 2005 onwards and you can do it using just your Accounts Office reference. You can find your 13-character Accounts Office reference on the front of your payslip booklet or on the letter we issue in place of the booklet.

We will estimate how the payment should be split between PAYE and NICs, and correct it later when we process the Employer’s Annual Return (P35 and P14s).

If you would prefer us to record an accurate split, you should continue to make separate payments of PAYE and NICs with the appropriate prefix in front of the Accounts Office reference:

  • P for your PAYE payment (for example P123PA00012345) and
  • N for your NICs payment (for example N123PA00012345).

You can find more information about this on the leaflet that is being sent out with your 2005-06 payslip booklet, or in the letter we issue in place of the booklet.

If you want to make a payment for an earlier month or year you must add 4 digits, representing the year and month you are paying, to the 13-character Accounts Office reference. For example 0508 to pay now for November (month 08) 2004 (year 2004/05).

For more information about making payments generally, including our bank account details and how to make payments for earlier months and years, see our How To Pay pages.

Electronic Payment

If you have received a Default Notice (only those with 250 or more employees might receive one) and
you don’t think it’s right, you need to appeal against its issue. Even if it’s your first or second Default Notice
contact us, explaining why you think it’s inappropriate and we will look at your case. Depending on the circumstances we may cancel the Notice. If the Notice is still appropriate we will explain why.

If you haven’t already done so, it’s not too late to contact us about Default Notices issued earlier in the
year. You can telephone 0191 244 5255 or write to:

The Receivables Employer Unit
Warwick House
Grantham Road
Newcastle upon Tyne
NE2 1RU

Payment dates

Please remember if you pay by any of the electronic methods, we must receive cleared funds in our bank
account no later than 22nd of the month.

All large employers (250 or more employees) must pay electronically.

If you are not a large employer and you pay by cheque we must receive it by the 19th of the month.

Small late payments

We have received several questions over the past few months about the effect of small late payments on the Default position.

We know that there could be times when you may not be able to deduct and pay PAYE within the correct tax month. If this happens you should correct the error as soon as possible by paying the shortfall with the next monthly payment.

Where this is done a Default Notice will only be issued if the next monthly payment is paid late. If an error is identified several months later and the shortfall is paid immediately, we will generally accept that the employer had a reasonable excuse for late payment. In these circumstances a manual Default Notice will not be issued.

The secure mailbox

PAYE Online for Employers - Internet is a 'two way' communication channel between the Revenue and the
employer.

When you register to use this service you are given a secure mailbox, which is where we send your online messages.

Check your secure mailbox on a regular basis to:

  • pick up notifications or reminders sent by the Revenue such as, employee tax codes. Messages stay in the mailbox until the user/assistant removes them
  • ensure the mailbox does not become overloaded.

If you give us an email address we will email you whenever we send a notice or reminder to your secure mailbox. This is to prompt you to check your mailbox.

Once you've registered for PAYE Online for Employers we will send all statutory notices and reminders to your secure mailbox unless you ‘opt out’. You can do this when you activate PAYE Online for Employers. If you’ve already activated the service you can select 'change your statutory notice option' on the PAYE service page.

Contacting the Revenue

We have recently made improvements to our contact centre services.

The Revenue’s Contact Centre network is the first point of contact for any member of the public with a
query, relating to their Income Tax, National Insurance or Tax credits affairs.

Employers can now talk to someone with a query about a specific employee (so that they can deal with their PAYE correctly) provided no personal information, unrelated to the query, is divulged by either person.

Once the employer has passed the security checks advisers can answer questions. Here are a couple of examples of the sort of queries we will deal with:

"The code number you have sent for A. N. Other results in £500 tax this week – should it be on a Week 1 basis?"

"My employee has received a notice of coding showing a new code but I have not received a P6, can you confirm and send a duplicate?"

Some calls may still need to be passed on to another office. The employee’s consent will still be needed if an employer is calling to give or receive personal information. This might apply with queries like this:

"A. N. Other has paid £20 more tax this week. I have explained that you sent me a revised code. He hasn’t received a P2 so he’s asked me to phone you to find out why he has paid more tax."

Tax Credits

Renewals

The final deadline for claimants to renew their tax credits awards for 2004-05 has just passed (31 January).

If any of your employees didn't send their forms in or waited until the deadline you could receive more stop or amendment notices than usual in the next couple of weeks.

We will start to finalise claimants' 2004-05 awards in April, and at the same time we will set their provisional 2005-06 awards. If you are paying tax credits at 5 April 2005, you should continue to do so at the rate we most recently told you. If we want you to stop payments or amend the daily rate we will tell you in the usual way.

If your employees ask you about the renewals process you can refer them to the Tax Credits Helpline on 0845 300 3900 (Great Britain) or 0845 603 2000 (Northern Ireland).

Overpayments

If we have paid too much tax credit in 2003-04 we will usually expect it to be paid back. In the notice finalising an award for the year, we will tell the claimant the amount they have been overpaid and how we expect them to pay it back. We normally reduce tax credit awards for the current year until the
overpayment is all paid back or, where there is no ongoing award, we ask for a payment to be made directly to us, by cheque, for example. There are maximum amounts by which we would reduce a current year award to recover any overpaid tax credit from the previous year. This process does not directly
affect employers. In future years we may reclaim overpayments by adjusting the employee’s PAYE tax code but we will not be doing this during the next tax year.

Funding

If we have been giving you funding during 2004-05 and you need this to continue in 2005-06, you will need
to renew your funding application (on form TC716).

We will send you the form at the end of March and you must return it to us by 20 May 2005 for funding to
continue without a break.

P35

When you complete your P35, online or on paper, don’t forget to show the total tax credits paid to employees and the amount of funding received in 2004-05.

More Information

If you need more information about paying tax credits, see booklet E6 Working Tax Credit on the enclosed CD ROM. Or you can order it from the Orderline.

If you need further help you can phone the Employer’s Helpline on 0845 7 143 143 (text phone 0845 602 1380).

If you have any questions about tax credits funding, call Accounts Office Cumbernauld on 0845 602 3518.

Employer's Diary 2005

February 2005

  • February 19

    • Deadline for cheque payments for month ended 5 February to reach the Revenue’s Accounts Office
  • February 22
    • Deadline for cleared electronic payments for month ended 5 February to reach the Revenue bank account
  • February – by the end

    Expect your:

    • CD ROM/Employer’s Pack including Orderline information to order forms and guidance to help file your Employer’s Annual Returns and change your tax codes for next year
    • updated software/instructions from your provider if you use a payroll package
    • Employer’s Annual Return (P35) for 2004-05

March 2005

  • March – Early

    Expect your:

    • PAYE code changes for the new tax year (starting 6 April 2005) on forms P9(T)
  • March 19
    • Deadline for cheque payments for month ended 5 March to reach the Revenue’s Accounts Office
  • March 22
    • Deadline for cleared electronic payments for month ended 5 March to reach the Revenue bank account
  • March – End

    Expect:

    • any last minute PAYE code changes on forms P9
    • your Payslip booklet for 2005-06 (if you don’t pay electronically)

    We advise you to:

    • start preparing Employer’s Annual Returns (P35 and P14s)
    • prepare deductions working sheets, form P11, for each employee for 2005-06

April 2005

  • Early April
    • Register (if you need to) now to use PAYE Online for Employers if you want to file your Employer’s Annual Return (P35 and P14s) over the Internet
  • April 6
    • Check you have covered everything on the change of PAYE codes detailed on the P9X (on the CD ROM or available from the Orderline)
    • Computer payroll users - make sure you have updated your payroll parameters, including new limits for NI, tax etc
  • April – Mid to End
    • If you recently registered to use PAYE Online for Employers, keep an eye out for your User ID – you need to activate the service within 28 days
  • April 19
    • Deadline for cheque payments to reach the Revenue’s Accounts Office:
      • for month/quarter ended 5 April and
      • for any outstanding 2004-05 PAYE and Class 1 NICs. (Interest will be charged on any payments received after this date)
  • April 22
    • Deadline for cleared electronic payments to reach the Revenue bank account for:
      • month ended 5 April and
      • for any outstanding 2004-05 PAYE and Class 1 NICs. (Interest will be charged on any payments received after this date)

May 2005

  • May 3
    • Deadline for P46(CAR)(NEW) forms for quarter ended 5 April to reach the Revenue
  • May 19
    • Deadline for your 2004-05 Employer’s Annual Return (P14s and P35) to reach your Revenue office (We will apply penalties if forms are received late)
    • Deadline for cheque payments for month ended 5 May to reach the Revenue’s Accounts Office
  • May 20
    • Deadline for cleared electronic payments for month ended 5 May to reach the Revenue bank account
  • May 31
    • Last date for giving a P60 form to each employee working for you at 5 April 2005

Gender Recognition

Transsexuals will be allowed to legally change their recorded gender. This may affect their National Insurance Contributions.

The Gender Recognition Act comes into force from April 2005 and allows transsexuals to apply to have their acquired gender legally recognised.

If the application is successful a Gender Recognition Certificate will be issued. The certificate is a legal document. It gives the date from which the person is to be legally recognised in their acquired gender.
This date will be used to consider any rights and responsibilities that are associated with that acquired gender.

Employers given a Gender Recognition Certificate must recognise the person in their acquired gender,
and where necessary adjust their National Insurance Contribution liability.

P46

You no longer need to send in the carbon copies of the P46 form. Our computer systems now provide the
relevant information direct to the different departments.

You should continue to send in the top copies of the P46, using up any P46 forms you have. We have
produced a new P46, which exists as a single sheet and is available from the Orderline.

If you send your P46s in online you may find you get a faster response.

NICs and Personal Allowance changes from April 2005

In the Chancellor’s Pre Budget Report he announced changes to the National Insurance Contributions
(NICs) earnings limits and thresholds (the amounts where the employee starts to pay NICs) and to the levels of Personal Allowances.

All the NICs changes will be reflected in the National Insurance Tables for 2005-06, and the calculators on the enclosed CD ROM.

For details of the rates, limits and thresholds have a look at:

  • the E12 booklet PAYE and NICs rates and limits for 2005-06, which is on the enclosed CD ROM and will be in your Employer’s Pack, or
  • visit the website at www. inlandrevenue.gov.uk

To account for changes to Personal Allowances you should follow the instructions on the P9X form.

Waiver Goodbye

The waiver of the 3% diesel supplement for new diesel cars that meet the Euro IV emissions standards will be withdrawn.

The 2000 Budget announced a waiver of the 3% supplement for diesel cars that met Euro IV emissions standards to apply from April 2002. It was introduced to encourage early take-up of Euro IV technology and has been successful. Once the standards become compulsory, the EC Directive requires that financial incentives for early takeup must be withdrawn.

So from 6 April 2006 the waiver will be withdrawn for cars registered from 1 January 2006. It will be retained for the life of diesel cars that meet Euro IV emissions standards and are registered before 1 January 2006.

Charity begins at work

Some employers may now be able to get a grant of up to £500 to set up a Payroll Giving scheme.
Payroll Giving allows employees to make charitable donations straight from their salary, before tax is deducted.

So, for a standard rate taxpayer a £10 donation will only cost £7.80, or just £6 for higher rate taxpayers.

Payroll giving:

  • is an easy and flexible method of giving
  • is low cost
  • enables employees to support charities and your local community.

Employers with fewer than 500 employees can apply for the grant if they establish a scheme before March 2007.

And there’s an extra bonus. The Government will match donations, pound for pound up to a maximum
of £10 per month, for the first six months of each employee’s donations.

Call the Payroll Giving SME grant hotline for further information on: 0845 602 6786

Tax avoidance schemes

If, as an employer, you have used a tax avoidance scheme you must tell the Revenue at the same time as you file your Employer’s Annual Return (P35 and P14s).

Promoters of tax avoidance schemes and arrangements have had to give scheme details to the Revenue since new rules were introduced in March 2004. When they do we give each scheme a reference number which must be passed on to each client using that scheme, who in turn must tell the Revenue the reference numbers of the schemes they use.

The P35 will be changed for 2006-07 so that you can give the avoidance scheme reference as well as the year in which the tax advantage arises, on the form or online. Until then you should tell us this information on form AIU4.

The deadline for the AIU4 is 19 May after the end of tax in which the scheme reference is received, or in which advantage arises, whichever is the earlier. The AIU4 should sent to the

Avoidance Intelligence Unit
22 Kingsway
WC2B 6NR

For further information about disclosure requirements or a copy of the AIU4 visit the AIU website. You can also obtain a copy of the AIU4 from the SA Orderline:

Tel: 0845 9000 404 (8am to 10pm everyday)
Fax: 0845 9000 604
or online

Share and share alike

The report must show any securities received or bought by reason of their employment in the tax year 2004-05, or tax charges for securities bought or received in earlier years, and should be made on Form 42.

If you are not sure whether a report should be made please ring the Share Schemes team on 020 7147 2819 or 2843.

You can get a copy of Form 42 from the Share Schemes pages

The completed form should be returned to

IR Share Schemes
Room G52
1 Parliament St
London, SW1A 2BQ

If any of your employees exercised options or received securities (for example, shares) in your company in the tax year ending 5 April 2005, you must report this to the Revenue by 6 July 2005.

The X factor

Employers do not normally have to file a P14 for any employee who paid no tax and earned below the
Lower Earnings Limit (LEL) for National Insurance (NI) when working for them unless they have other financial information to report, for example tax credits.

In these cases the NI category letter that must be shown on the P14 is X.

Whenever the NI category letter X is used, the earnings and contributions fields of the P14 must show nil
(0.00) amounts, because the employee’s earnings did not reach the LEL at any time. If the employee’s earnings met or went over the LEL NI category letter X is not appropriate. You should use the appropriate
category letter, for example category letter A.

If you are not sure which NI category letter to put on the P14 please phone the Employer’s Helpline.

End of Year 2005

Countdown to 19 May

This year we will be looking more closely at the quality of paper Employer’s Annual Returns, and we may be sending more back to employers.

To help you, here are some common mistakes:

Number Mistake
5
wrong forms: the P14 relates to an earlier year (so order new ones from the orderline) or is on stationery that hasn’t been approved
4
incomplete P35 – even just a missing signature makes it incomplete
3
 missing cover sheet for part P14 submission
2

forms can’t be read because they:

  • have faint print, mis-aligned boxes or carbon smudges
  • are stapled, glued, or otherwise attached
  • are not separated. Each P14 should be separated from its carbon copy.
1
 missing forms: you must send in a P35 and P14s

 

You might find it easier to Do it online - see the 4 page pull-out. Employers with 250 or more employees must file online.

Your 2004-05 Employer’s Annual Return (P35 and P14s) must reach us by 19 May 2005 but remember you can send them in from 6 April onwards.

If you need help:

  • use Employers Helpbook E10 – Finishing the Tax Year on the CD ROM, or internet
  • visit the BST page or call your Business Support Team or
  • phone the Employer’s Helpline.

Late Return penalties

We have recently changed our processes regarding the late filing penalty for an Employer’s Annual Return
(P35 and P14s).

The Employer’s Annual Return is due by 19 May. If we receive it late, or we don’t receive it at all, a penalty will be applied. Any local agreements about alternative filing dates are being withdrawn.

When we reject a return because it has been incorrectly completed you must correct those errors and resubmit by the 19 May if a late filing penalty is to be avoided.

On the rare occasion that it is necessary for you to send an amended return, when the original was made negligently, we will consider whether a further penalty should apply.

Contact numbers and online services

Calls may be monitored for quality control and training purposes

Helpline (telephone advice) Orderline (order your forms and guidance)

Been an employer less than 3 years?
Been an employer more than 3 years?
  • Helpline 0845 60 70 143
    Mon-Fri 8am-8pm
    Sat-Sun 8am-5pm
  • Helpline 0845 7 143 143
    Mon-Fri 8am-8pm
    Sat-Sun 8am-5pm
Textphone 0845 602 1380
(for employers who are deaf or hard of hearing)
(only people with specialised equipment such as Minicom are able to use this number)
  • Orderline 0845 7 646 646 Mon-Fri 8am-8pm, Saturday 10am-1pm
  • Fax 0870 2 406 406 (Please use your Fax Order Form)
  • most of the forms you’ll need can be downloaded from the Employer’s CD ROM

IR Online Services Helpdesk (including technical support for Employer’s CD-ROM )
Helpline 0845 60 55 999
e-mail helpdesk@ir-efile.gov.uk

Weekdays 8am-10pm

 

Weekends 10am-6pm

 
Payroll Accreditation process

    
0845 915 9146 Weekdays 9am-4pm  
Stakeholder Pensions    
Helpline 0845 7 143 143 Weekdays 8am-8pm Weekends 8am-5pm
If we are sending you too many packs, CD-ROMs or Bulletins, or you have changed address, please contact the Inland Revenue office that you normally deal with and let them know. Thank you.

Managing Editor: Don Macarthur
Editor: Jo Hegarty

If you want to send us any feedback about Employer's Bulletin please complete our online questionnaire.

or email

Production: Inland Revenue, Employer Programme, London

Bulletin is not comprehensive and has no legal force. It does not affect any right of appeal.

The Inland Revenue has a range of services for people with disabilities, including Braille, audio and large print. Contact your Inland Revenue office for details.

Accounts Offices:

Shipley 01274 530750
Cumbernauld 01236 736121

To find the number of your local Inland Revenue office, look in the phone book under ‘Inland Revenue’.

Contractors

Helpline 0845 7 33 55 88 Weekdays 8am-8pm Weekends 8am-5pm
     
Orderline 0845 3000 551 7 days a week 8am-10pm  

Sub contractors

Helpline 0845 3000 581 7 days a week 8am-8pm
   
Orderline 0845 3000 551 7 days a week 8am-10pm

National minimum wage (NMW)

Helpline 0845 6000 678 Weekdays 8am-6pm
   
Orderline 0845 845 0360 7 days a week, 24 hours

NICs special topics
Contracted out Pensions

Helpline & Orderline 0845 9 150 150 Weekdays 8am-5pm

Non-residents

Helpline & Orderline 0845 9 154 811 Weekdays 8am-5pm

 

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