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PAYE Returns

When the tax year comes to an end every 5th April it is time for employers to start thinking about their PAYE returns. There are strict deadlines for filing these and you must make sure they are met otherwise you will incur automatic penalties. Fortunately, the main returns are produced automatically by most payroll systems so you should only need to check them and hand out P60s to your staff. However, you may also need to complete P11Ds for expenses and benefits and these are not always straightforward.

It is now compulsory to file your PAYE returns on-line. Manual returns are no longer allowed. Most payroll software now comes with an on-line filing facility so doing your year-end returns should be a fairly simple process. However, you should make sure the software is compliant with the Revenue systems and has been listed by them as an approved product. Alternatively you can use the free software run by Government Gateway although this is not suitable for payrolls with more than 50 employees.

One of the benefits of on-line filing has been the automatic checks that now prevent some of the more common mistakes that always used to cause a high number of submissions to be rejected each year. However, it is still possible for errors to creep into the returns and it is advisable to carry out your own basic checks on the figures or ensure that your software will do this for you. P60s must be handed out by 31st May each year so make sure your post-submission procedures are adhered to. It is surprising how many bosses put them in a drawer and forget about them!

P11Ds are more difficult to complete as the figures often need to be calculated from expense claims or cash book records. Sometimes a benefit may arise unexpectedly or certain items may not be covered by your dispensation. It is important that your accounting system can pick up these items otherwise you may have a lot of work to do at the end of the tax year. Fortunately the filing deadline for these forms is not until 6th July so you have 3 months to collate the information. However, for smaller companies it is usually best to ensure that P11D items do not arise in the first place unless they are for known benefits such as company cars or cheap loans that you are prepared to pay Class 1A NI on.

You may also have an obligation to provide information under a PAYE Settlement Agreement. There is no set deadline for these but they should be submitted in good time for any tax and Class 1B NI arising to be paid by 19th October the same year.

At Acumen we can either prepare your PAYE returns for you or train your staff to do them taking into account any specific issues affecting your particular business. Please give us a call if you require our assistance for anything to do with PAYE returns.

Information Sheets PAYE Tips
bulletpoint On-line registration
Make sure you have up-to-date addresses for your employees before doing their P14s.
NI contributions
Check that the NI payroll totals for each employee agree to the figures declared on the P14s.
Make sure you claim all recoverable amounts for statutory payments such as sick pay or maternity pay.
PAYE liability
Ensure that the balance owing on your P35 agrees to the outstanding PAYE liability for the year before submission.
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