Understanding and using PAYE Online for employers

HM Revenue & Customs (HMRC) requires almost all employers to use PAYE Online. This service can be used to send and receive a wide variety of notices, forms and returns including filing:

• your Employer Annual Return (forms P35 and P14)
• some in-year PAYE forms, including employee starter and leaver information (forms P45 and P46)

From 10 April 2012, changes have been made to PAYE Online for employers who are now reporting their payroll information using the PAYE Real Time Information (RTI) system. If HMRC hasn’t told you to use PAYE RTI you must not use these features even though they may be available to you.

HMRC will continue to use PAYE Online to send important notices and messages you need to correctly operate PAYE. You can read these notices and messages through PAYE Online and also set up email notifications so you know when there’s a new message or notice.

It may be more convenient for you to use the PAYE Desktop Viewer (PDV) to read some of the information sent to you by HMRC. Some certain payroll software may allow you to read messages and notices and submit certain returns too.

This guide explains how to get started with PAYE Online.

On this page:

Changes to PAYE Online for employers from April 2012

The PAYE Online for employers service has changed to allow employers who are using HMRC's new 'PAYE in real time (RTI)' system to continue to use this service.

Only a small number of employers are affected and HMRC has notified those employers who are involved in the pilot. All employers not in the pilot should continue to use PAYE Online in the same way and ignore any new sections that refer to RTI.

The main new section - RTI messages - will only contain information if you are in the pilot.

You'll be able to continue to:

  • Set up email reminders.
  • Send any new employee information - P45 Part 3, P46, P46 (Pen) or P46 (Expat) using PAYE Online.
  • Send any leaver information. Again, your payroll software will send this - so don't send P45 Part 1.
  • File your 2012-13 annual return - that is, P14, P35 and P38A, unless you are asked to using HMRC's new RTI system part way through the year.
  • Send expenses and benefits returns - including P46(Car), P9D, P11D and P11D(b) - either through PAYE Online or directly from your payroll software if it supports this feature.

You can read more about the PAYE real time information pilot, there's a link at the end of this guide.

Employer requirement to file online

Your Employer Annual Return

Almost all employers are required to file their Employer Annual Return (P35 and P14s) online, only a small number of employers are exempt from online filing. To check if you're exempt, follow the 'Guidance for exempt employers' link below.

File your Employer Annual Return: P35 and P14s

Guidance for employers exempt from online filing

In-year forms including P45 and P46

Almost all employers are required to file the in-year forms shown in the table below online. If you file on paper instead of online, you may have to pay a penalty.

Form When to use
P45
Part 1
When an employee leaves your business
P45
Part 3
When a new employee starts
P46 When a new employee starts, but has no P45 from their previous employer
P46
(Pen)
For sending details of a new pension or annuity that you start to pay
P46
(Expat)
For sending details of certain types of employees seconded to work in the UK

File your PAYE in-year forms: P45, P46, etc

Other forms you can file online

You can send many other PAYE forms and returns to HMRC online. To see a full list, follow the link below.

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

Forms and returns that can't be sent online

There are a number of forms and returns that you can't file online to HMRC:

  • 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 CIS25s

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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 the HMRC website, which is most suited to employers with small numbers of in-year forms to send or up to 50 P14s to file at the end of the year
  • a commercial software package (some of which are free) with an online filing function
  • HMRC's P11 Calculator, which is part of the Basic PAYE Tools package
  • Electronic Data Interchange (EDI), which is suited to very large employers
  • a payroll agent or bureau, who will file online 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 HMRC's online service.

You can also use HMRC's P11 Calculator as part of the online filing process. Employers who have up to and including nine employees at the end of the tax year can use the P11 Calculator to file their Employer Annual Return (P35 and P14s) online. You can also use it to file your in-year forms (P45 and P46) online.

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The registration process for PAYE online filing

If you want to file online using either HMRC's free online service or commercial software (some of which is free) you will need to register with HMRC and activate your service within 28 days of receiving an Activation Code in the post. The steps involved in registration are explained in another of our guides (see the link 'Details of how to register for HMRC's PAYE online service' below).

There is a separate registration process if you plan to file PAYE forms using EDI. This is explained in another of our guides (see the link 'More about EDI filing for large employers' 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 HMRC. Bear in mind, though, that you will still need to register with HMRC if you want to handle any of your other PAYE tasks online, such as receiving your tax coding notices.

How to enrol for PAYE Online if you're not able to use the online tax registration service

Go to the Online Services homepage to start the registration process

EDI filing for large employers

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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 the HMRC 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 HMRC's free online filing service, then you don't need any further software to file online. If you use commercial software you should check that it permits online filing and that you have the most up to date version of that software. You can use the link below to see a list of the commercial software (some of which are free) that HMRC has successfully tested.

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

PAYE recognition for payroll software and online forms

Online Services: Payroll Standard and Pensioner Payroll Standard Accredited products and services

EDI filing for large employers - including technical requirements

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Make sure you send HMRC the right employee information

Using PAYE Online is a fast, convenient and secure way of exchanging information with HMRC. It cuts down on time, administration and errors and it means that you'll get up-to-date PAYE information, such as updated employee tax codes much faster.

When using PAYE Online you must make sure you send HMRC the correct information about your employees. If you do you will save time by reducing the number of employee queries you get, as well as helping to make sure that your employees pay the correct tax and National Insurance contributions. Over 80 per cent of problems are caused because the wrong information is held about an employee's name, date of birth or National Insurance number.

For each employee you must always use their:

  • Full name and not just the initial(s). Make sure that the forename(s) and surname are correctly spelled and that they are in the right order.
  • Actual date of birth. Do not use a default date or make one up.
  • Correct National Insurance number. Do not make a number up or use someone else's.

Wherever possible, check the information with a trusted official source such as a birth certificate or passport.

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Viewing the notices and reminders HMRC sends you online

When you register and activate the PAYE Online service, HMRC will automatically make available your PAYE notices and reminders, such as P6 and P9 tax code notices, to you to view online. There are three ways of accessing these:

  • use a commercial software product (some of which is free)
  • from the HMRC website
  • with a free desktop viewer you can download from HMRC and install to your computer

Once you have registered you will no longer receive your PAYE notices and reminders on paper unless you change your notice options. PAYE reminders online are mandatory while there is an online registration.

Viewing your notices on the HMRC website

You can log on to the PAYE online service using your User ID and password and select one of the following options:

  • tax code notices
  • student loan notices
  • employer notices

Each year in February/March, HMRC will issue P9 Tax codes and Student Loan notices which are applicable to the new tax year. The HMRC Data Provisioning Service (DPS) displays data in the tax year which they relate to and therefore when checking for the notices prior to 6 April it will be necessary to change the 'Tax Year' in order to view them.

HMRC recommends that you provide an email address, as the PAYE Online service will then notify you each time a notice or reminder has been sent to you.

Using the PAYE Desktop Viewer (PDV)

The PDV is an application you can download from the HMRC website and install on your computer. It provides greater flexibility than viewing your PAYE notices and reminders on HMRC's website. The PDV is particularly suitable if you receive a lot of codes and notices during the year.

Using HMRC's PAYE Desktop Viewer

Check regularly for new notices

The notices and reminders HMRC sends you can contain important information that you'll need to operate PAYE correctly. So whether you view them on the HMRC website or using the PDV, it's important to check regularly to see whether any new ones have been sent to you. Remember, providing your email address will help to ensure that you don't miss any new notices or reminders.

Requesting to have notices sent on paper

You can ask HMRC to resume sending paper versions of most of your notices, but form P35N and all reminders relating to your Employer Annual Return will continue to be sent online.

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Filing your Employer Annual Return (P35 and P14s) online

When to file

Your Employer Annual Return must reach HMRC by 19 May after the tax year to which the return applies. You may be charged a penalty if your return is received later than this. Remember, almost all employers are required to file their Employer Annual Return online and if you don't do this you may also be charged a separate penalty.

What happens when you've filed your Employer Annual Return

As soon as HMRC receives your return online, it will be checked against the HMRC Quality Standard. You'll get a message - usually within a minute, but allow up to five - letting you know whether HMRC has accepted or rejected your return.

HMRC's free 'Online Return and Forms - PAYE' service, as well as many commercial software packages (some of which is free) are built around the Quality Standard, so in most cases any errors in your return will have been highlighted and corrected before you file.

If you haven't had to maintain a form P11 for any of your employees

In this case you don't need to complete an Employer Annual Return, but you must contact HMRC so that they can update your record accordingly. HMRC recommends that you do this online using a simple online form - follow the link below.

Notify HMRC online that you have no Employer Annual Return to make

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Viewing your PAYE liabilities and payments online

When using the PAYE Online service, HMRC will automatically make available details of your employers annual return, payments and other information for example, interest and penalties. You will be able to see a summary of your PAYE position for 2010-11 and later years. For each tax year, you will be able to view a breakdown of the amounts shown in the summary.

Log in to HMRC Online Services

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Time limits for storing and deletion of records on HMRC's system

The information you file with HMRC using their Online Return and Forms service is retained within this system for three years, in line with normal PAYE record keeping rules.

Each year around October/November, HMRC upgrades this online service and at the same time deletes records that are no longer required. HMRC deletes all records that are:

  • More than three years old - for example, in October 2010 all records submitted before April 2007 were deleted from the online service. HMRC does however keep a copy of this information on its internal systems.
  • Less than three years old, but which contain information that has not been submitted or updated during the previous 12 months.

If you wish to keep any of these records for your own purposes, you (or your agent) should check the records held on the HMRC Online Returns and Forms service and take the following action.

  1. For records older than three years (ending on 6 April just passed) - either save them to your own systems or print them off.
  2. For records less than three years old, but which have not yet been filed with HMRC or updated in the previous 12 months, first check if you need to file them with HMRC now. If there's no need to file them but you still wish to retain them, you'll need to save them to your own systems or print them off.

After the annual upgrade, you won't be able to use the online service to access any records which have been deleted in line with the criteria above.

You also won't be able to access the online service at all while it is being upgraded. You can find out more about the 'Service availability' by using the link at the end of this guide.

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More useful links

Real Time Information: an introduction for employers

Improving the operation of PAYE: Real Time Information (RTI)

Details of how to register for HMRC's PAYE online service

More about filing your Employer Annual Return online

Using HMRC's Basic PAYE Tools

File your PAYE in-year forms: P45, P46, etc

Avoiding and correcting errors in your Employer Annual Return: (P35 and P14s)

Common errors to avoid when filing forms P45 or P46

More about the Payroll Standard benchmark for commercial payroll software

Attend an HMRC online filing workshop

Service availability page

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