Changes to Employer Annual Returns and starter and leaver PAYE forms will affect farmers and landowners
Last week, HMRC issued an alert to employers about PAYE changes coming in this spring which will affect farmers and landowners employing staff. The changes affect Employer Annual Returns and starter and leaver PAYE forms.
From April, employers with fewer than 50 employees must send, on-line to HMRC, employee starter and leaver forms: P45s, P46s and related pension information.
Furthermore, all employers who send their Employer Annual Return to HMRC after the 19 May filing deadline will now receive a late-filing penalty. Until now, an extra-statutory concession gave employers extra time before HMRC charged a penalty, but this has been withdrawn.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 charging penalties and interest for late payment of PAYE. Employers will be liable if they haven’t made PAYE payments on time, and in full, from April 2010. The amount will depend on the amounts paid late and the total number of late payments made. Penalties and interest will be charged after the tax year-end.
By the 19th May, employers must file an Employer Annual Return (EAR) – a P14 for each employee and a P35 summary sheet. They must do this online - with some very limited exceptions. If an employer has not previously sent their return online, they must act now by registering for HMRC’s online service. HMRC has published a list of common errors to avoid on its website.
Richard Cartwright, a partner of Saffery Champness Landed Estates and Rural Business Group says:" Almost all farmers and landowners employing staff will be affected by the changes. Rural employers are already at a disadvantage due to poor broadband coverage, but HMRC relentlessly pursue the requirement to deal with them online, and are also charging penalties and (in the case of tax payments) interest as well. The penalty and interest regime is particularly pernicious in that the charges will appear after the end of each tax year, and could be an unwelcome surprise for some employers.
