We are now one month away from the end of the tax year, so we are looking at payroll tasks that need to be completed around the year end, and benefit changes that need to be reported before 6 April 2015. We also have an update on HMRC’s relationship with tax agents, and how you can influence the new online systems they are building.
The end of year reporting under RTI should be easier this year, as most employers have gone through the procedure once already for 2013/14. The Employer Bulletin number 52 has some detailed guidance, but unfortunately it is not totally accurate.
The end of year checklist (questions previously on the P35) is not required for 2014/15 as the PAYE regulations have been changed, but most payroll software has not. Thus although employers don’t have to answer those questions, thier payroll software will not permit a ‘final’ report to be filed for 2014/15 without answers being given.
It is crucial that the last FPS for 2014/15 is marked as “final”, and it is submitted to HMRC within three days of the last payment day in the tax year. Any delay beyond this three day grace period will trigger a penalty for the employer. Although large employers (50 or more employees) are allowed one late filing in 2014/15, other employers are not. So if the last FPS for the year is more than 3 days late, the unfortunate small employer will get a penalty notice.
If you forget to mark the last FPS as “final”, you can submit a nil EPS as the final submission of the year. If you need to correct information on the final submission this should be done on an amended FPS before 20 April 2015. Any corrections after that date need to be submitted on an Earlier Year Update (EYU).
Finally, watch out for letters from HMRC closing PAYE schemes. They plan to close around 15,000 PAYE schemes which have made no RTI reports since April 2013. These could include schemes which are kept open solely to report P11D benefits.
This is an extract from our tax tips newsletter dated 5 March 2015. The newsletter itself contained links to related source material for this story and the other two topical, timely and commercial tax tips. It’s clearly written and extremely good value for accountants in general practice. Try it for free by registering here>>>