End-of-year tasks: annual return and form filling

In this section:

PAYE end-of-year tasks at a glance
Finalising form P11 at the end of the tax year
File your Employer Annual Return online: P35 and P14s
Avoiding and correcting errors in your Employer Annual Return
Expenses and benefits at the end of the tax year
Expenses and benefits at the end of the tax year
PAYE dates to remember this month
PAYE Online login page

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Avoiding and correcting errors in your Employer Annual Return

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

Each year, simple errors lead to HMRC rejecting Employer Annual Returns (form P35 and forms P14) that have been filed online. Now that almost all employers are required to file their annual return online, 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
Filing the right forms
Entering employee information
Common errors to avoid on form P14
Common errors to avoid on form P35
Correcting errors after you’ve filed your return
List of valid National Insurance number prefixes
More useful links

PAYE Online registration and login

Allow time to activate PAYE Online

In order to file online, you must be registered with HMRC’s ‘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 PIN 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 PINs

Common problems during the login process include:

confusing your user ID (which the Government Gateway sends you on a card) with your password (which you choose) or your Activation PIN (which you receive in the post, separately from your user ID)
losing or forgetting your password, user ID or Activation PIN
mixing up similar characters - for example using the letter 'O' instead of '0' (zero), 'S' instead of '5' or 'Z' instead of '2'

Read about how to register for PAYE Online and 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 payslip 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 - as of April 2009 it’s a mandatory feature in all payroll software.

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 in more useful links 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 AB 12 34 56 C.

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

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

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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 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

National Insurance rates and thresholds

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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