TaxPersonal TaxQuestions & Answers.

Questions & Answers.

Each month Frank Haskew and Francesca Lagerberg of the ICAEW’s tax faculty provide practical advice on topical tax issues. This week they examine PAYE on the internet.

Q: Mr Hector runs a debt collection business (Hector & Co) with a large number of employees. He wants to try and reduce the payroll paperwork. How can I use the net to file end-of-year PAYE tax return forms?

A: The Revenue has launched an internet service for PAYE. You can access it through the Inland Revenue website and links to the Government Gateway, the centralised registration service for electronic transactions with the government.

Employers and their agents can register to use the service now although they can only start filing from around 9 April. Registered users will be able to send the following PAYE End-of-Year return forms over the web: P35 – Employer’s Annual return; P14 – Individual Employee’s End-of-Year Summary; and P38A – Employer’s Supplementary Statement.

The service will be extended to include other PAYE forms and returns in later months. Those using the service will need to be using approved software as listed on the Revenue’s website.

Employers who use the internet service to send in their 2000-2001 PAYE end of year returns by 19 May 2001 and make at least one electronic payment of tax for 2000-2001 by 19 April 2001 will qualify for a one-off discount of #50.

Employers who qualify for the PAYE discount, and also pay tax credits through payroll in 2000-2001, will qualify for a further #50 discount.

The PAYE and tax credit discounts will also be available to those employers who use an agent, payroll bureau, or other intermediary, to send their 2000-2001 end of year return over the internet. To qualify the employer will need to register online for the service and notify the Revenue of their agent’s Gateway Agent ID.

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