Online Filing

1.37 Service company or partnership Returns

If you are a service company or partnership, you can include provisional pay figures including the deemed payment if you do not know the exact amount at the 19 May. Send them to us online ensuring a tick is placed in box 6 of the P35. To avoid penalties, you must send us corrected figures by the following 31 January but you will still be charged interest from 19 April on any further sums due. No extra time is allowed where the deemed payment is due during the tax year following an in year event.

1.38 Net of foreign tax credit schemes

Some employees who work abroad are liable to tax on the same income in more than one country. With our agreement, you can give your employees credit against PAYE tax for the foreign tax taken off and paid overseas.

Where you give relief for foreign tax taken off and paid overseas, this amount has previously been shown in red at the bottom of the P14. But if you send in the P14 online, you must show only the PAYE tax deducted.

You must write and tell us, separately, by 19 May, how much foreign tax credit relief you have given to each of your employees as well as their names and National Insurance numbers.

1.39 Employer’s Supplementary Return (P38A)

Online filing does not change the rules for the Employer's Supplementary Return (form P38A). If you send us the P38A on paper, but the P35 and P14s online, you will still qualify for the tax-free payment for online filing if you are a small employer.

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1.40 End of year certificate - P60

You must, by 31 May, give each of your employees an end of year certificate (P60) if they were still on your payroll on 5 April.

If you file online, you can order P60s from our Employer's Orderline on 0845 7 646 646. They are available in different formats (landscape, portrait, shortened, and a continuous version).

You will need to check with your software provider that your payroll software will produce paper P60s in a format approved by us. If it does not, you need to get paper P60s from us. Call our Employer's Orderline on 0845 7 646 646.

Even if you have been giving your employees electronic payslips, you must give your employees a paper form P60 at the end of the tax year.

You must not, by law, give them P60 details electronically for them to print off.

You must not enter a negative statutory payment on the P14. Any statutory payment wrongly paid is not a statutory payment but an overpayment of earnings, which should be corrected in the same way as any other overpayment of earnings.

Under the new Gender Recognition Act 2004 you must show the gender of employees at the date of submission on the P14 and not the gender at birth.

1.41 Overpaid statutory payments

If you have overpaid statutory payments, for example, a woman comes back to work early, say in March, and Statutory Maternity Pay is no longer due for that month but it is too late to change the March salary calculation:

  • recover the overpaid Statutory Maternity Pay in April (the new tax year)
  • do not report the overpayment on the P14 for the previous tax year, but
  • do adjust (in the new tax year) the amount of Statutory Maternity Pay recovered and Statutory Maternity Pay compensation to reflect the excessive claim for the previous tax year
  • having assessed the right amount of National Insurance contributions due in the previous tax year, make sure that this is reported on your P14s and P35 for that year, sending us an amended Return if necessary.

1.42 Employee's private address

We have updated our free Online Return and Forms - PAYE product so that you can fill in an extra (optional) box on the P14 with your employee's address.

Putting the address in helps us to tie-up the P14 details with your employee's records.

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1.43 Construction Industry Scheme

If you operate PAYE and the Construction Industry Scheme under the same employer's PAYE reference number, you must put your total Construction Industry Scheme deductions from your contractor's Return (CIS36) onto your online P35 in box 8.

If you have offset some or all of your Construction Industry Scheme deductions made from your own income against your own company's tax bill, you must show the amounts from your CIS132 on your online P35 in box 31. This only applies if you are a limited company.

You cannot file your CIS36 online. But you can send continuation sheets to us by Electronic Data Interchange.

1.44 End of year penalties: failure to file online

You will face a penalty of up to £3,000 if you send us your Return (or part of your Return) on paper or magnetic media when you should be filing online.

The penalty still applies even if you try to put things right by filing your Return again online. This is because the first Return, or part of it, was not filed the right way in the first place.

The penalty will apply regardless of when you file your Return.

You must send your whole Return online when the law says you must, and it must meet our Quality Standard.

Remember that:

  • if you are a large employer (250 or more employees) you must file online
  • if you are a medium-sized employer (50 - 249 employees) you must file online starting from 2005-06 (Return due by 19 May 2006)
  • if you are a small employer (fewer than 50 employees) you do not have to file online until at least 2010, but you can get tax-free payments over five years for filing online early.

The penalty depends on the number of P14s that should be included in your Return.

Number of employees for whom P14s should have been in your return Amount of penalty for 2004-05
£
 Amount of penalty for 2005-06 to 2008-09
£

1 - 49

0

0

50 - 249

0

600

250 - 399

900

900

400 - 499

1,200

1,200

500 - 599

1,500

1,500

600 - 699

1,800

1,800

700 - 799

2,100

2,100

800 - 899

2,400

2,400

900 - 999

2,700

2,700

1,000 or more

3,000

3,000

1.45 Reasonable excuses for not filing online

Sometimes it may not be possible for you to send your Return on time for reasons beyond your control (or the control of your agent or bureau). If this happens, you can appeal against the penalty because you had a reasonable excuse for not sending in your Return, which you sent as soon as the obstacle was out of the way.

If you are a small employer, you will only qualify for the early online filing tax-free payments if you file online. You will not get the tax-free payment if you try to file online but cannot for reasons beyond your control.

You can appeal against a penalty for not filing online when the law says you must if you have a ‘reasonable excuse’ for not doing so.

There is no legal definition of ‘reasonable excuse’. But our view of a 'reasonable excuse' is limited to events beyond your control. We consider the facts of each appeal.

You must send your appeal to the address shown on the penalty notice within 30 days of the date shown on the notice, telling us why you did not file online. If we do not agree that you have a 'reasonable excuse' we will refer your appeal to the Appeal Commissioners.

If you stop trading in 2005-06 or later years, we expect you to make your final Return online from April 2005 if you are a large or medium-sized employer. See ‘Cessation Returns when you stop trading’.

1.46 Examples of excuses for not filing online, and our view of them

Example one

'I did not send my Return online to avoid a late filing penalty.'
This is not a 'reasonable excuse'. There is enough time between the end of the tax year (5 April) and the date you must file your Return online (19 May).

Example two

'My computer broke down and the data was lost so I could not file online.'
This is not a 'reasonable excuse'. Reasonable care should have ensured that a working computer was available in time.

Example three

'All my computerised records have been lost.'
We may agree that loss of all your records in a fire or flood, or if they are stolen, is a 'reasonable excuse'. But we will need evidence of what happened. You will have had to have done your best - perhaps with our help - to put together the best estimates that you could make. If you could not file online despite doing your best to reconstruct your records, we would not charge the penalty.

Example four

'I have suffered from serious illness or a bereavement.'
We accept that serious illness or the death of a close relative or (domestic) partner may mean that you have to delay online filing. This is a 'reasonable excuse'. But if you later send your Return in on paper when it should have been filed online we will not regard your illness or bereavement as an excuse for not filing online.

Example five

'Using a computer is too difficult. I am not computer literate.'
This is not a 'reasonable excuse'. If you have trouble using a computer, then you should get help. You could consider using a payroll agent or bureau, who could file online for you.

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Example six

'I was under so much pressure of work that I did not have time to file online.'
This is not a 'reasonable excuse'. If the information is available to send, then there is no reason why it cannot be filed online before the deadline. Remember that the penalty is for not filing online when you should, not for filing late.

Example seven

'My agent or payroll bureau did not file online on my behalf.'
This is not a 'reasonable excuse'. You are personally responsible for making sure that your Return is filed online.

Example eight

'I originally sent my Return in on paper, but have now sent it in again by filing online.'
This is not a 'reasonable excuse'. If you send your Return in on paper when you should be filing online you cannot avoid a penalty by following up later with an online Return. The penalty applies if you do not make your Return online. Trying to put it right later cannot alter that fact.

Example nine

'I tried filing online, but could not because I did not meet your Quality Standards for accuracy and completeness.'
This is not a 'reasonable excuse'. You must make sure that you use payroll software which meets our Quality Standard.

Example ten

'I did not have enough information to complete my online Return.'
We would not agree that you could not complete your online Return because you did not have all the information you needed if we get your Return on paper.

Example eleven

'HM Revenue & Customs did not tell me that I had to file online'
We have written to every employer to tell them how online filing affects them and when they must file online. Where our letters are undelivered, we send them out again as soon as we have a new address. We have also publicised online filing widely and our staff have been contacting all large and medium-sized employers to remind them that they must file online, and offering to help them do so.