End of Year - Guest Blog by Toni Hunter

The end of the tax year is a busy time for those administering the payroll function. There are a number of forms which need to be filed and it is a good time to check that you have been carrying out your payroll calculations correctly throughout the year and rectify any mistakes.

2009/10 is the first year that online filing is mandatory for all employers regardless of the size of the business. Paper filing of forms is no longer an option.
It has been mandatory for large employers to file their forms electronically for some time now but up to last year smaller employers still had the option to file in paper format should they choose to. Electronic filing has now become mandatory for the smaller employer too.
The deadlines which affect end of year payroll are summarised in the table below.

Late Payment of PAYE Penalties
Late payment penalties are being introduced from May 2010 if your PAYE is paid late. Currently interest is only charged when the final PAYE payment for the tax year is received either later than 19th April for postal payments or arrives in HMRC’s bank account later than 22nd April if paid electronically.

From May 2010 your PAYE payment will need to be received on time either each month or each quarter depending upon which basis you pay.  The new late payment penalties will apply to all employers and contractors that do not pay on time.

Details of the new penalties will not be sent out until April 2011 but will apply for the whole of the 2010-11 tax year. Penalties will start at 1% of the late amount and will increase to 4% depending upon how many times you pay late. You will not have to pay a penalty if only one payment is late unless it is more than six months late. Payments that are more than six months late may attract a penalty of 5% and a further 5% if still outstanding after more than twelve months.

Businesses will have to ensure that HMRC always receive their payment on time to avoid the penalties. Postal payments will need to be received by HMRC by the 19th of the month. Electronic payments will need to be received in HMRC’s bank account by 22nd of the month.

If you have any queries regarding the preparation of your payroll our in-house payroll bureau PayScheme will be happy to help. Contact a member of the team on 01767 220199.

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