Tax-free payments employers with fewer than 50 employees
9.1 Tax-free payments for employers with fewer than 50 employees
If you have fewer than 50 employees, you will get tax-free 'incentive' payments if you file your Employer Annual Return online. If you were one of the majority of small employers who filed online for 2004-05 and 2005-06, you will have qualified for the tax-free payments adding up to £500 for those years. Do not miss out on future tax-free payments:
- file online for 2006-07 (Return due by 19 May 2007) and get £150
- file online for 2007-08 (Return due by 19 May 2008) and get £100
- file online for 2008-09 (Return due by 19 May 2009) and get £ 75
You will not qualify for a tax-free payment if you send us an unnecessary Return. (See 'If you do not have to make a Return' and 'Sending in a P35 with no financial entries, but with P14s', and 'Legislation'.)
To qualify for a tax-free payment:
- you must have fewer than 50 employees in the relevant tax year
- you must send your Employer Annual Return online where there is a requirement to make a Return. Your P35 must have at least one valid P14 with it
- the information in your Return must be of the required quality, that is, it must meet our Quality Standard.
You will not get a tax-free payment if your Return contains no financial entries.
You will get a tax-free payment whether you file online or an agent or payroll bureau files online for you. If you want the payment to go to your payroll agent you must let us know in writing when you make your claim.
You will get the tax-free payment after you successfully file your Return online.
You will qualify even if you file your Return after 19 May (the date by which it should reach us). But you could be liable for a late filing penalty if your Return is late.
You will not qualify for the tax-free payment if any part of your Return is sent to us on paper or using magnetic media.
You do not get any tax-free payments for sending forms online during the tax year.
We will tell you when we have credited the tax-free payment to your PAYE record. We will send you an online notification if you have registered and activated PAYE Online for Employers – Internet. You will be able to see your online notification by using our Data Provisioning Service (DPS). We will send this ‘letter’ online 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 DPS to view from your (or your agent’s) PAYE service page.
If you want us to send you email alerts when you have new notices and reminders to deal with, you must use the link ‘change email address’ under ‘Notice Options’ on your PAYE service page. You must do this even if you gave us your email address when you first registered.
We will only send a tax-free payment 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.
The quickest and easiest way that most of you can get your tax-free payment is to 'self-serve' by deducting the tax-free payment amount from your next PAYE payment(s) to us for 2007-08. 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 developer may re-phrase the messages that we send before they appear on your software. So check what acceptance and rejection messages you will see, with your provider.
It is possible that you will get your tax-free payment notification after you have self-served your payment. If you do, please ignore the tax-free payment letter.
We recommend that you send a 'nil' PAYE payslip for any complete month(s) or quarter(s) covered by the tax-free payment. Or contact your Accounts Office if you do not have a payslip booklet. 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.
