EMPLOYERS WHO haven’t filed their annual P35 returns summarising employees’ tax deductions will receive reminder letters from HM Revenue and Customs (HMRC) soon after the deadline to avoid months of penalty charges building up.
Under an agreement between HMRC and tax bodies including the ICAEW and the Association of Taxation Technicians, the taxman will send employers an “interim” p35 penalty letter within a month after the 19 May deadline for filing returns. The letter will say the employer has incurred a late return penalty and explain what to do to avoid it increasing.
Employers who do not file their annual P35 return by the deadline, incur penalties of £100 per 50 (or fewer) employees for every month (or part month) that their return is late.
In some cases, employers were unaware their returns were late until they received a first penalty letter in September covering four months’ worth of accrued penalties, HMRC said.
HMRC has also promised to:
• Change the date when we issue the “Notification to complete form P35 Employer Annual Return 2011/12” from mid-February to mid-March 2012, so that employers will receive it much nearer to the end of the tax year.
• Improve the online guidance for submitting P35s online
• A helpline staff to tell employers about filing dates when setting up new employer schemes to help them avoid a penalty.