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

Each year, simple errors lead to HM Revenue & Customs (HMRC) rejecting Employer Annual Returns (form P35 and forms P14) that have been filed online. Almost all employers are required to file their annual return online, so it's important to be aware of these errors and avoid them.

This guide tells you how to avoid common problems when registering for and logging on to the PAYE Online for Employers service and how to avoid simple mistakes when completing your P35 and P14s online. It also explains the steps you'll need to take if you discover that you've filed an annual return that contains an error.

On this page:

PAYE Online registration and login

Allow time to activate PAYE Online

In order to file online, you must be registered with HMRC's PAYE Online for Employers service. The registration process only takes minutes, but you won't be able file online until you have 'activated' the service using an Activation Code that HMRC sends you by post. This can take up to a week to arrive - so don't leave registration and activation until the last minute.

User IDs, passwords and Activation Codes

Common problems during the login process include:

  • confusing your user ID (which you need to take a note of when you register for the online service) with your password (which you choose) or your Activation Code (which you receive in the post)
  • losing or forgetting your password, user ID or Activation Code
  • mixing up similar characters - for example using the letter 'O' instead of '0' (zero), 'S' instead of '5' or 'Z' instead of '2'

Registering for PAYE Online and how to get new login details

PAYE reference

Make sure that you use a PAYE reference that's valid - don't use an old one that's been cancelled. (Your PAYE reference is valid even if you ceased trading during the past year).

Enter the PAYE reference in the correct way - you need to submit it in two separate fields:

  • in the first field, put the three digit PAYE Office number
  • in the second field, put your employer PAYE reference (you can find it on your payment booklet) - with no spaces or hyphens in front of it and don't repeat the three digit office number in this field

An example of a PAYE reference in the correct format is: 913/WZ51258.

IR Mark error message

IR Mark is a feature of commercial payroll software packages that generates a receipt when you submit your PAYE forms.

It's been a mandatory feature in all payroll software since April 2009.

Some commercial software packages have had problems with the feature, so if you get an error message including the term 'IR Mark' you should contact your software provider.
If you use the free 'Online Return and Forms - PAYE' filing service on HMRC's website, you won't be affected by this.

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Filing the right forms

You can only use the PAYE online service to file your PAYE forms. To file any other HMRC forms online, such as VAT or Self Assessment returns, you'll need to enrol and log in to the relevant online services separately. Do this in the online services homepage - see the link at the end of this guide.

Make sure also that you only file each form once - don't submit the same form both online and on paper.

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Entering employee information

First name

Only enter the following characters in the field for your employee's first name:

  • A-Z letters (upper or lower case)
  • hyphens (-)
  • apostrophes (‘)

The first character of this field must be an A-Z letter - not a space, comma, full stop, hyphen or apostrophe.

Surname

Don't include extra information in this field, such as 'staff' or 'temp'.

National Insurance number

The correct format for an employee's National Insurance number is two letters followed by six numbers followed by one optional letter (this final letter is always A, B, C or D). An example is QQ123456A - though Q will never be used in a real National Insurance number.

The first two letters must be from of a set number of valid prefixes. These never include the letters D, F, I, Q, U or V. Use the table at the end of this guide to check a National Insurance number includes a valid prefix.

If you don't know your employee's National Insurance number don't make up a number. Instead:

  • leave this field blank, but make sure you complete the fields for date of birth and gender
  • ask HMRC to find an employee's National Insurance number by sending in a completed form CA6855

Download form CA6855 Employees National Insurance Number Trace (PDF 68K)

Tax codes

Take care with tax codes 0T and D0 - both contain a zero, not the letter 'O'.

The code 'NI', which is sometimes used informally for students working during their holidays, is not a valid tax code and shouldn't be used on form P14. Instead leave the 'Final tax code' box on form P14 blank for student employees.

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Common errors to avoid on form P14

Date of Birth

Ensure you enter your employee's correct date of birth.

National Insurance contributions (NICs) letter C

Don't use NICs letter C for pension-only schemes - use category X.

National Insurance contributions (NICs) letter X

There are only three circumstances when you use category letter X:

  • for employees paid below the Lower Earnings Limit for every pay period they work for you
  • for pension-only schemes (don't use category C for these)
  • for workers from abroad

Scheme Contracted Out Number (SCON)

Any SCON you enter must be genuine - issued to you by the National Insurance Services to the Pensions Industry.

You must enter it in the correct format, which is: the letter S, followed by 0 or 1 or 2 or 4 or 6 or 8, followed by six numbers, followed by a letter.

You must complete the SCON field for each line on form P14 that has any of the following NICs letters: F, G, H, K, S or V. Leave the SCON field blank for all other letters.

Box 1a

Box 1a is for 'Earnings at the Lower Earnings Limit (LEL) where earnings reach or exceed the LEL'. You must enter:

  • a number in whole pounds and not a negative amount
  • '0' if the NICs table letter is X
  • more than '0' if the NICs table letter is A, D ,F, H, J, L, N, Q, R, S or V
  • no more than the maximum possible LEL amount for the year

Box 1b

Box 1b is for 'Earnings above the LEL up to and including the Earnings Threshold (ET)'. You must enter:

  • a number in whole pounds and not a negative amount
  • '0' if the NICs table letter is X
  • more than '0' when 'Earnings above the ET up to and including the Upper Accrual Point (UAP)' is greater than '0' and the table letter is A, D, E, F, G, H, J, K, L, N, O, Q, R, S or V
  • no more than the maximum possible ET amount for the year

Box 1c

Box 1c is for 'Earnings above the Earnings Threshold (ET) up to and including the Upper Accrual Point (UAP)'. You must enter:

  • a number in whole pounds and not a negative amount
  • '0' if the NICs table letter is X
  • more than '0' when the 'Total of employee's and employer's contributions payable' field is greater than 32 pence and the NICs table letter is A, D, E ,F, G, H, J, K, L, N, O, Q, R, S or V
  • more than '0' when the 'Employee's contributions payable' field is greater than 16 pence and the NICs table letter is A, D, E ,F, G, H, J, K, L, N, O, Q, R, S or V
  • no more than the maximum possible UAP amount for the year

Box 1d

Box 1d is for 'Earnings above the UAP up to and including the Upper Earnings Limit (UEL)'. You must enter:

  • a number in whole pounds and not a negative amount
  • '0' if the NICs table letter is X
  • No more than the maximum possible UEL amount for the year

Box 1e

Box 1e is for the 'Total of employee's and employer's contributions payable'. Your entry in this field must be:

  • a number
  • '0' if the NICs table letter is X
  • equal to or more than the amount shown in the 'Employee's contributions payable' field if the NICs table letter is A, B, J, R, T or Q.
  • equal to or more than '0' when the NICs table letter is A, B, C, J, Q, R, T or W

Box 1f

Box 1f is for 'Employee's contributions payable'. Your entry in this field must be:

  • a number and not a negative amount
  • '0' if the NICs table letter is C, W or X
  • equal to or less than the amount shown in the 'Total of employee's and employer's contributions payable' field when the NICs table letter is A, B, J, R, T or Q

Tax deducted in previous employment(s)

Ensure the entry for the amount of 'tax deducted in previous employment(s)' is not greater than the 'pay in previous employment(s)'.

Tax deducted in this employment

If you have refunded more tax than you have deducted 'In this employment', ensure that the amount of tax refunded is not greater than the 'tax deducted in previous employment(s)'.

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Common errors to avoid on form P35

Box 3, 'Total NICs'

Add together all of the 'Total of employee's and employer's contributions payable' (Box 1e) on your P14s for all of your employees. You should enter this total in Box 3 on form P35.

Box 4, 'Total tax shown above'

Ensure that you have completed a form P14 for every employee for whom you were required to complete a form P11 or equivalent record. Also ensure that the amount of 'Tax deducted in this employment' on the employee's form P14 reflects the amount shown on the form P35.

Box 7, 'Advance received from HMRC to refund tax'

Ensure that you have entered the correct amount of the advance received from HMRC. You may have recorded these payments on form P32 Employer Payment Record (or equivalent) or on your P30BC Payment Booklet.

Box 9, 'Total NICs and tax'

Add together the 'Total NICs' (Box 3) and 'Total tax' (Box 8).

Box 10, 'Total Student Loan deductions'

Ensure that the amount of 'Student Loan deductions' entered on the form P14 reflects the amount shown on the form P35.

'Combined amounts' Box 11

Ensure that the amount entered in this box equals the 'Total NICs and tax' (Box 9) plus the 'Total Student Loan deductions' (Box 10).

Box 12, 'Statutory Sick Pay (SSP) recovered'

Enter the amount you are entitled to recover under the Percentage Threshold Scheme (PTS), not the total SSP paid to your employees. For more information on the PTS, read our guide 'Calculating and recovering SSP'.

Calculating and recovering SSP

Rates and thresholds for employers

Box 15, 'Statutory Paternity Pay (SPP) recovered'

Enter the amount you are entitled to recover. This will be equal to or less than the amount of SPP which was paid and recorded on the P14s and does not include the amount of compensation. For more information read our guides on calculating and recovering SPP.

Rates and thresholds for employers

Calculating and recovering Ordinary Statutory Paternity Pay

Calculating and recovering Additional Statutory Paternity Pay

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Correcting errors after you've filed your return

If you discover a mistake in your Employer Annual Return after you've filed it, you will need to file an amended version of the form containing the mistake. If the mistake is on a form P14, you must also send an amended form P35.

Any amended forms you send to HMRC should contain only the amended information - whether this is a positive or negative amount. Do not file a new form containing the revised totals.

For example, if your original P14 for an employee incorrectly shows a PAYE tax deduction of £100.13 instead of the actual figure of £10.13, you should send HMRC another P14 for the employee. But this second form shouldn't record the correct figure of £10.13. Instead it should show the difference between the original amount and the actual figure. So in this example, the amended P14 should show -£90.00.

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List of valid National Insurance number prefixes

It's important to get your employees' National Insurance numbers right when filing PAYE forms online because HMRC will reject forms containing invalid numbers.

The table below lists all the valid National Insurance prefixes - the two letters at the beginning of an employee's National Insurance number. If the National Insurance number you have for an employee contains a prefix not listed in this table, then you should use form CA6855 to find out the correct National Insurance number to use for the employee.

First letter Valid National Insurance number prefixes
A AA, AB, AE, AH, AK, AL, AM, AP, AR, AS, AT, AW, AX, AY, AZ
B BA, BB, BE, BH, BK, BL, BM, BT
C CA, CB, CE, CH, CK, CL, CR
E EA, EB, EE, EH, EK, EL, EM, EP, ER, ES, ET, EW, EX, EY, EZ
G GY
H HA, HB, HE, HH, HK, HL, HM, HP, HR, HS, HT, HW, HX, HY, HZ
J JA, JB, JC, JE, JG, JH, JJ, JK, JL, JM, JN, JP, JR, JS, JT, JW, JX, JY, JZ
K KA, KB, KE, KH, KK, KL, KM, KP, KR, KS, KT, KW, KX, KY, KZ
L LA, LB, LE, LH, LK, LL, LM, LP, LR, LS, LT, LW, LX, LY, LZ
M MA, MW, MX
N NA, NB, NE, NH, NL, NM, NP, NR, NS, NW, NX, NY, NZ
O OA, OB, OE, OH, OK, OL, OM, OP, OR, OS, OX
P PA, PB, PC, PE, PG, PH, PJ, PK, PL, PM, PN, PP, PR, PS, PT, PW, PX, PY
R RA, RB, RE, RH, RK, RM, RP, RR, RS, RT, RW, RX, RY, RZ
S SA, SB, SC, SE, SG, SH, SJ, SK, SL, SM, SN, SP, SR, SS, ST, SW, SX, SY, SZ
T TA, TB, TE, TH, TK, TL, TM, TP, TR, TS, TT, TW, TX, TY, TZ
W WA, WB, WE, WK, WL, WM, WP
Y YA, YB, YE, YH, YK, YL, YM, YP, YR, YS, YT, YW, YX, YY, YZ
Z ZA, ZB, ZE, ZH, ZK, ZL, ZM, ZP, ZR, ZS, ZT, ZW, ZX, ZY

Download form CA6855 Employees National Insurance Number Trace (PDF 68K)

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More useful links

PAYE online filing for employers - more detail

Find contact details for HMRC's Online Services Helpdesk

Go to the Online Services home page