PAYE Update – May 2011

Tax Comments Off on PAYE Update – May 2011

Summarised below are a number of changes and issues that have been recently publicised by HMRC including the following:

  • From April 2011 employers with less than 50 employees must file starter and leaver forms electronically.
  • Any Employer’s Annual return submitted after 19 May 2011 will now receive a late filing penalty.
  • For 2011/12 and later, penalties will apply to paper returns filed by employers with less than 5 employees where they are late.
  • PAYE penalties will be issued for employers with more than 50 employees who have not filed their starter and leaver forms on-line.  The first penalties will apply for the 3 months to 5 April 2011, and later penalties will be issued on a quarterly basis.
  • Penalties apply where PAYE has been paid late and in full, since April 2010.  The penalty will depend on the number of late payments and the amounts involved.  Penalties will be charged after the end of each tax year.
  • The annual PAYE reconciliation uses a tolerance level that means small amounts of underpaid tax are not collected.  The tolerance level will revert from £300 to £50 for 2010/11 and later years.  The effect of this is that where an underpayment of £50 or more has accrued a tax calculation will be issued and the underpayments will be collected.
  • Benefits that have been taxed through the payroll must also be included on the employee’s P11D, or the equivalent list of benefits.  Penalties could apply if this is not done according to HMRC instructions.  Please call if you have any concerns or would like further guidance.

Please do give me a call if you have PAYE queries.

Sue Stephens

Tax Manager