Your Employer Annual Return is due by 19 May following the end of the tax year. Filing your return online is quick, easy, convenient, secure and it's a requirement for almost all employers.
This guide lists the different ways you can file your return online and sets out what you need to do to get started. It explains how to amend your return if you need to make a change after it has been filed. And it provides a link to separate guidance for employers who are exempt from the requirement to file online.
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This is the last Employer Annual Return most employers will need to complete. PAYE in real time (or RTI) reporting started on 6 April 2013. You will already have received a letter from HM Revenue & Customs (HMRC) 'The way you report PAYE is changing. Are you ready'.
Employers who began operating PAYE in real time during 2012-13 must not complete an Employer Annual Return (forms P35 and P14) nor must they notify HMRC that they have no return to make. Instead they must notify HMRC that this is the final submission for the tax year on a Full Payment Submission (FPS) or an Employer Payment Summary (EPS).
Unless you are already reporting PAYE in real time, you must complete and file an Employer Annual Return if you have had to maintain a form P11 (or equivalent payroll deductions record) for at least one employee during the tax year. This applies even if you didn't have to make any deductions of PAYE tax or National Insurance contributions (NICs) from your employee(s) during the year.
The Employer Annual Return comprises of:
Your return must reach HMRC no later than 19 May following the end of the tax year. If your return is late, HMRC will charge you a penalty that will continue to increase for each month or part month the return remains outstanding.
In this case you don't need to complete an Employer Annual Return but you do need to tell HMRC that you won't be sending one in. Doing this will prevent you receiving a late filing penalty if HMRC was expecting you to submit a return. To find out how, read the later section 'Notifying HMRC if you have no Employer Annual Return to make'.
If you are required to file an Employer Annual Return, you'll also need to submit a form P38A to HMRC if you've had any employees during the year to whom both of the following apply:
You can file a P38A online and HMRC recommends that you do it this way.
Alternatively you can file on paper by:
You will not get a penalty for not filing a P38A online.
If you are a new employer claiming the NICs holiday, you must read this guidance in conjunction with the guidance on completing the NICs holiday end-of-year returns.
Almost all employers are required to file their Employer Annual Return (forms P35 and P14) online. The only employers who can file on paper are:
If you file your return on paper when required to file online, HMRC will charge you a penalty.
If you haven't had to maintain any forms P11 during the tax year you don't need to complete an Employer Annual Return - but you do need to tell HMRC that you won't be completing one. If you don't, they may send you unnecessary reminders or penalty notices.
Exceptionally, if you are a Limited company who had no employees but are eligible to make a claim for CIS deductions suffered for payments received for work within the construction industry, do not send a 'No return to make' notification. Instead, file a form P35 only online indicating the CIS deduction amount.
If you are an employer who began operating PAYE in real time in 2012-13 you must not notify HMRC that you have no return to make.
If you're an employer you'll need to provide:
For information about how and when to complete a form P11D(b) return, follow the link at the end of this section.
If you're an agent you'll need to provide:
HMRC strongly recommends you notify them online that you have no return to make using the links below. Not only is it quicker, cheaper and easier than writing or calling but HMRC will also confirm via email that they have received your online notification. HMRC will also send you a second email to confirm when your declaration has been processed.
Please note that you will not be able to save the information you input during completion therefore it's important that you have it all to hand before you start (see previous section).
Any errors when completing could mean your form is rejected or may require HMRC to contact you, which may delay your notification being processed. A common error to avoid is failing to tick one of the two boxes at the end of the form which relate to whether a form P11D(b) is due or not due.
There are different online forms for employers and agents. Agents wishing to use this facility must be registered for the PAYE online service for agents.
Alternatively, you can notify HMRC that you have no return to make by calling the Employer Helpline or writing to the Employer Office. Please note however that you won't normally receive a written acknowledgement if you notify by these methods.
If you've registered as a new employer since April 2012 it may have been done automatically if you used HMRC's online tax registration service. If you don't have a user ID and password you are not already registered for PAYE Online. HMRC recommends you do so now.
In order to file your Employer Annual Return online you must first register as a user of the 'PAYE Online for Employers' service (or 'enrol' if you're already using another online service).
Registering or enrolling for PAYE Online only takes a matter of minutes, but you'll need to wait to receive an Activation Code in the post before you can start to file online. This will take up to a week to arrive. The deadline for filing your Employer Annual Return is 19 May but you start reporting your payroll in real time from your first payday after 6 April 2013, so you must have registered by then.
There's a range of online filing methods you can use to send your Employer Annual Return (forms P35 and P14) to HMRC. Please note that you're not restricted to using just one of these options. For example, you could have an agent file your P14s but then file your form P35 yourself using HMRC's free service.
If you use a software package for your day-to-day payroll during the year and it fulfils the criteria of the HMRC PAYE recognition testing, it will automatically complete and file your return online at the end of the tax year.
You can read more about HMRC's recognition scheme and the software which meets the criteria for them by following the link at the end of this section.
If you choose new software to use for sending your 2012-13 Employer Annual Return make sure you consider the changes in PAYE reporting in real time from 6 April 2013.
You may be able to use the Basic PAYE Tools package to file your return. These are designed for employers with nine or fewer employees. Make sure you use the version which allows you to send your Employer Annual Return for 2012-13.
This service is available on the HMRC website, and can be used to file returns containing up to 50 P14s. There are four steps to filing your return online using this service:
You can have an agent or bureau file online on your behalf, using the figures and records you provide to them.
EDI is an online-filing option that's generally suited for larger employers only. It has a separate registration process and more complicated software and telecommunications requirements.You are not restricted to using only one of these options, for example, your agent could file your P14s and then you could file form P35 separately.
When you file your Employer Annual Return online it's checked against HMRC's Quality Standard to make sure the information you've provided is in the correct format. If your return is rejected you must correct it and file it successfully. You must do that before the 19 May deadline to avoid having to pay a penalty. If you are unable to meet the deadline then you must file your return as soon as you can after 19 May to limit the penalty you will face for filing your return late.
There are a number of common errors to look out for when you file online - these are a frequent cause of returns being rejected. Follow the link below for a list.
HMRC's Basic PAYE Tools and also many commercial payroll software packages will let you make a test submission so that you can check to see if your Employer Annual Return contains any issues to be fixed before you file it properly. If you choose to do a test submission don't forget that you will still need to file a live return.
A test submission is subject to the same authentication and validation processes as a live submission. If your test submission is successful you will receive the message below via your software:
Software - 9001: this submission would have been successfully processed if sent under non test conditions.
In addition to this message, if you have provided HMRC with an email address, you will also get a successful submission email. This says that if the submission was a test you still need to make a live submission.
Please note the email you receive will be the same whether it is a test or a live submission, so it is important you make sure you send the live submission after the test.
Don't forget that you still need to file a live return after your test has been successful. If you are unsure if you have sent a test or a live submission you can check as explained in the next section.
When you file your Employer Annual Return online, the submission is received at the Government Gateway where an identity reference - called a 'correlation ID' - is attached. This allows HMRC to track the progress of the submission. Receiving the correlation ID does not indicate that the submission has passed the filing checks - just that it has been received at the Government Gateway.
Your submission is then sent from the Gateway to HMRC to be checked for errors and omissions, after which you will get an acceptance or rejection message through the software or service you use. These messages are usually issued within a minute of filing, but it can take longer if your return covers a large number of employees.
If your return is successful, you'll get the following messages:
If your return is rejected, you'll get the message 'Software - your message will highlight the area(s) of your return that have led to its rejection'.
Email - 'The submission for reference [your PAYE reference] was received on [date]. Unfortunately it could not be accepted as it failed data checks. To correct this, please use the help provided within the software you used to complete your form and send it again'.
If you do not receive either an acceptance or rejection response, please contact HMRC's Online Services Helpdesk.
If you've provided HMRC with an email address, you will also get an email message. Please note: the email you receive will be the same whether it is in a test or a live submission, so it is important you make sure you send the live submission after the test.
You are advised to take a screen print of any acceptance or rejection messages and keep a copy of any emails you receive.
You can also check the status of the submission if you use:
For more detailed information about acceptance and rejection messages which you may receive, depending on which method of online filing you have used, follow the link below.
Please note that the 'Last updated' date shown on HMRC's Online Returns and Forms service or 'Last Modified' date shown on Basic PAYE Tools is the date the content of the return was last changed, not the date of submission itself.
If you filed your Employer Annual Return before 6 April (for example, because you ceased being an employer), HMRC will still let you know straight away whether the return has been accepted or rejected. However, the return won't actually be processed for tax and NICs purposes until early April. Please remember to check carefully that the return you are sending is for the correct tax year. For example, if you are sending your return because you ceased being an employer on 10 May 2012, the return you must send (for the period 6 April 2012 to 10 May 2012) will be for the 2012-13 tax year.
You can file your forms P14 and your form P35 separately to HMRC. This might be useful if your payroll arrangements make it impractical to send the entire return at the same time - for example, if a payroll agent files your P14s for you but you file your P35 yourself.
Follow the link at the end of this section for more detailed information, but bear the following points in mind if you're considering sending your return in this way:
If you have overpayments of PAYE from an earlier year you should not attempt to make any informal adjustments to your Employer Annual Return. The details entered on to the Employer Annual Return must correspond with the total amounts due shown on individual P14s.
In some circumstances adjustments can be made as part of the completion process, for example advance funding of statutory payments. If this is possible the online form clearly allows for that adjustment as part of the completion process.
Even if you've had a letter from HMRC regarding an overpayment you should not enter this on the Employer Annual Return. This letter explained that HMRC would transfer the same amount to your account for the current year. This action has already been taken.
You can now view details of payments you have made and amounts that you owe using:
If you need to amend your Employer Annual Return after you've sent it to HMRC you must take the following steps:
Sending amended information means that your original return was either incomplete or inaccurate and could mean that you may be charged a penalty.
Amended information doesn't have to be filed using the same format you used for your original return. For example, even if you used commercial payroll software to file your return, you could send an amendment using HMRC's free 'Online Return and Forms - PAYE' service.
If you use an agent to file your Employer Annual Return, you must keep a written record confirming that the information they've filed on your behalf is correct. Any written confirmation - such as a letter or email - is acceptable.
You can download a sample form P35 to record and confirm the information you've agreed with your agent - but if you do this, make sure you don't send it to HMRC as they will then consider you to have filed on paper, and almost all employers are now required to file their Employer Annual Return online. HMRC may therefore charge you a penalty for failing to file your return online if you send in this paper P35.
You don't need to keep a copy of the Employer Annual Return (forms P35 and P14). But you do need to keep a copy of the records you used to prepare and file your return so that you are able to provide supporting evidence if HMRC asks for it.
If you file using the HMRC Online Returns and Forms service electronic records are automatically kept in line with normal PAYE record keeping rules. The guide 'Using HMRC's Online Service - PAYE for employers' gives more information.
Even if you kept paper PAYE payroll records you still don't have to keep paper copies of your Employer Annual Return (forms P35 and P14). If you do wish to keep paper records you can download a copy of the form P35 and forms P14 to record the information you wish to keep.
Question six in Part three of the P35 Employer Annual Return - Are you a Service Company?
There is information about how to answer this question in the Employer Helpbook CWG2.
Follow the link below for more information about the Intermediaries Legislation, sometimes known as IR35.
Or you can phone HM Revenue & Customs' (HMRC's) IR35 helpline.
If you are unsure about how to respond HMRC would advise you to answer 'No' to question six in Part three of the P35.