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Payroll - Areas of potential problems and penalties

Online Filing

Payroll on-Line forms and registration

The employer annual return forms P35 and P14 for the current and subsequent tax years must be filed on-line. There are very few employers that will be exempt from this requirement. From 6 April 2011, you must also file all of your in-year forms P45/P46 this way. If you have not yet registered for on-line filing then you need to do so without delay. Contact Shirley Stiles or Hazel Ray if you require assistance. 

Penalties and interest charges

From 1 October 2010, HMRC have been issuing notices where PAYE payments have been late. Actual penalties will not be issued until after the tax year end, but you should check your records carefully, as some on-line payments made on time, but not correctly allocated by HMRC, are giving rise to a late payment notice unfairly.

Automatic penalties already apply for late submission of payroll end of year forms and CIS monthly returns.

The last date for on-line filing of 2010/11 year annual returns is 19 May 2011. Unlike previous years, the Extra Statutory Concession giving employers an extra 7 days after  this date. has now been withdrawn.

Compliance

National minimum wage

The annual rate change was effective from 1st October 2010 and the rates are now as follows:

• Adult rate: aged 21 years and over, £5.93 per hour
• Youth rate: 18-20 years, £4.92 per hour16 and 17 years, £3.64 per hour

Please note the adult rate now starts from age 21 years. Any employee at, or reaching age 21 on or after 1st October 2010, must be paid the adult rate.

CIS

From April 2011, penalties will apply where payments are made late or not in full on more than one occasion within the tax year. It is important therefore that all new subcontractors are verified for payment with HMRC prior to commencement of their contract.

UK Border Agency

In order to ensure you are compliant with the new regulations, you should obtain photographic evidence of ID from all employees. If you choose only to check workers from overseas, you could be in breach of anti discrimination laws.

Please ensure you are eligible to employ foreign nationals and register as an employer if necessary. You can also check potential employees have the correct working visa and/ or permit by calling the Border Agency helpline on: 0300 123 4699 opening hours are Monday to Friday 0900 - 1700 (excluding public holidays)

PAYE Health check

Given the numerous changes in the last few years, we are pleased to offer our Health Check service to ensure you are compliant with HMRC and other government agency regulations.

To contact the payroll department click here.