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Employers urged to be mindful of PAYE changes

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Employers have been reminded of changes affecting annual returns and starter and leaver PAYE forms that have already or are soon to come into force.

HM Revenue and Customs (HMRC) has reiterated that, as from April, employers with fewer than 50 employees must now send starter and leaver forms – P45s, P46s and similar pension information – online.

All employers who send their employer annual return to HMRC after the 19 May filing deadline will now receive a late-filing penalty. Previously, an extra-statutory concession gave employers extra time before HMRC charged a penalty, but this has been withdrawn.

From this year, employers will be liable to a penalty if they file their annual return on paper. Last year, no penalty was charged for employers with five or fewer employees. But these transitional arrangements have now ended.

HMRC will also be issuing PAYE penalties this spring for the first time in two key areas.

Penalty notices will be sent out in April to employers with 50 or more employees who have not filed starter and leaver forms online to HMRC. The first penalties will apply for the three-month period to 5 April 2011, with further penalties being issued on a quarterly basis.

From May this year, HMRC will start sending out penalties for late payment of PAYE. Employers will be liable for a penalty if they haven’t made PAYE payments on time, and in full, from April 2010. The amount of the penalty will depend on the amounts paid late and the total number of late payments made. Penalties will be charged after the tax year-end.