In-year Filing Deadline Warning!

Does your PAYE scheme include 50 or more employees or leavers who you would normally file P14's for?

Back in October 2007, HMRC wrote to all employers about their legal obligation to electronically file their in-year forms online from 6th April 2009. These include the P45, P46 or PENNOT forms.

According to HMRC and payroll industry insiders, there is great concern that the vast majority of mandated employers appear to have done little or no preparation so far, even with the 12 month delay from the originally announced mandation date of April 2008. Only a minor proportion of employers have filed their In-year forms electronically and the numbers are not yet increasing at a fast enough pace to be considered appropriate.

Employers who fail to meet their in-year filing obligations potentially face 12,000 per annum fines (up to 3,000 for each quarter). However, there is a nine month cushion time built in before these penalties are actually inflicted on employers. Time is flying! Employers within small businesses (those with less than 50 employees) are not required to electronically file their mandatory In-Year forms until a much later date to that stated above.

How are you preparing to undertake the new in-year mandation requirements?

Do you have the technology, systems and software applications in place to undertake the interchange? Many employers may claim that they are waiting for their software supplier to provide the capability requirements. Equally accredited software must have the capabilities built in. Or must they? This is one of the contradictions of the present HMRC Payroll Standard, which was originally devised to help employers within small businesses make the choice of suitable desktop software packages. Consequently, HMRC accredited software packages do not have to have any In-Year filing capabilities. If they do it is purely a voluntary expansion. So be careful, ensure that your payroll software or service does enable you to fulfill your new legal obligations.

Unlike the tax year end, where the exchange with government is a one off annual exercise, in-year filing is more complex and more impacting on the day-to-day requirements of the payroll office. The solution is not purely software and technology based. New starter and leaver processes needs to be reviewed in-light of the new revised HMRC requirements. Local arrangement practices are withdrawn and all employees that meet the filing criteria must be interchanged between HR and HMRC electronically. If not then employers potentially face fines and penalties.

From April 2009, HMRC require more information to be provided. Has provision been made to capture new data elements which are now being made compulsory?

Although employers have been able to get away with a default birth date of "01011901" on electronic exchanges for their end of year documents (P14), this is not the case for in-year forms. From 6th April 2009, all electronic submission of HMRC forms (even if they relate to the prior tax year) that contain a birth date requirement must have a real birth date along with the employee gender.

In the March 2007 budget, Gordon Brown (who was the Chancellor of the Exchequer at the time) also announced measures in relation to in-bound ex-patriot workers. Although many of the original proposals have been revised or dropped, the HMRC have introduced a new P46(Expat) for any inbound ex-patriots who may now be working in the UK. Again, for any employer with 50 or more employees, they are obliged to interchange the new notifications with HMRC electronically.

Want to know more about in-year filing obligations?

IReeN acts as an independent user and lobby group for employers and organisations that electronically file with HMRC. Primarily formed to represent employers who interchange with HMRC via Electronic Data Interchange (EDI), the group also represents all electronic interchange with government including the Internet. It is a promoter of better electronic interchange with government and for modernising better business process.