The government is introducing mandatory electronic filing of end of year returns (forms P35 and P14) for all employers from 2009/10. Similar provisions will be introduced requiring PAYE and NIC to be paid electronically.
Under the new regime, end of year returns can be filed using:
Only the larger employers will be required to file electronically initially with those employing at least 250 people required to file their 2004/05 returns electronically by 19 May 2005. Employers with between 50 and 249 employees will be brought within the net for 2005/06 returns and those with fewer than 50 employees not until 2009/10.
However, in order to encourage smaller employers to adopt the new system the Inland Revenue will provide financial incentives to employers with fewer than 50 employees. Such an employer choosing to file electronically from 2004/05 will be entitled over the five year period until 2008/09 to a total of £825.
The provisions dealing with electronic payment of PAYE and NIC are still in draft although the proposals are to require all employers with at least 250 employees to pay electronically from 2004. The Inland Revenue will advise employers accordingly. There is also a default surcharge structure proposed providing for penalties to be charged where payments are made late.
The due date for payment by electronic means will be extended (for any employer paying electronically) by three days to within 17 days of the tax month end rather than 14 as now - ie extended from the 19th to the 22nd of each month.
Please give us a call if you would like to talk about this issue in more detail.