Last year for paper filing of PAYE

HMRC is in the final stage of phasing out paper filing for PAYE returns
forcing all companies to comply with online paper filing by 2010.

Accountants and businesses, with fewer than 50 employees are still able to
file using the traditional paper method for this year only but will miss out on
a potential £75 rebate from the tax man for using the internet filing system.

The rolling implementation started in 2004/05 year end when it became
compulsory for employers with over 250 staff to file online suffering a penalty
if they failed to comply.

A spokeswoman for HMRC said: ‘HMRC’s customers and their agents can fulfil
their tax obligations more accurately, more quickly and with greater certainty
using online services. For Government, greater use of online services releases
resources to focus on higher value activities such as customer service and
tackling non-compliance.’

HMRC created an incentive plan to coerce accountants and firms to implement
the internet system earlier. Companies that used the online system were eligible
for a £250 tax free rebate from 2004 – 2006 with this reducing from 2006/07 to
£150, 2007/08 to £100 and 2008/09 £75.

Further reading:

Q&A: HMRC online filing rules

HMRC’s e-filing software gaining ground

Related reading