Filing Annual Employer Returns online

Are you ready to file your annual returns online? Lucy Knowles finds out more

New government proposals will soon require employers of all poultry farm businesses to file their Annual Employer Returns online, regardless of the size of the company.

When does this apply?

Currently, poultry units with 50 or more employees already have to send their 2008-09 returns online. And this includes starter and leaver details.

Want to know more?

  • The HMRC offers a CD-ROM with step by step teach yourself programs covering all aspects of PAYE online. And an online service helpdesk is also available. 

But from April 2010, it will become compulsory for most companies to file employer 2009-10 annual returns online, no matter how many workers are employed at the business.

And from April 2011, it is likely that this will also include starter and leaver details.

However, poultry units with less that 50 employees who start to file online in advance will be ready and prepared for the rule change in 2010.

Another advantage for businesses with less than 50 employees is that a final tax-free payment of £75 will be made if 2008-09 Employer Annual Returns forms, P35 and P14, are sent on-line by 19 May 2009.

How do you determine the number of employees?

According to the HM Revenue and Customs (HMRC) website, it will count the number of employees you have at your business by every notification from the employer that a new member of staff has started work. This is done by either through P45 part 3 or a P46.

An employer will then receive written confirmation from the HMRC by the 30 December each year. This will advise them what size their business is and provide details of which forms are required to be filed online.

How do you file online?

There are a number of methods you can use in order to file online. And the HMRC website offers free on-line return and forms (PAYE service).

Or you pay prefer to use an agent or payroll bureau who can file online on your behalf.

However, you might find it easier and more cost-effective to use a software package that will help you to file your payroll efficiently.

One such example is a payroll program called Earnie available from Agricultural IT Specialists Farmplan.

The software has the ability to automatically calculate tax and National Insurance. It will also automatically complete and file your Employer Annual Return at the end of the tax year.

What are the benefits of filing online using Earnie?

Online filing is more secure than sending forms through the post as everything sent is encrypted.

There is also less room for mistakes as errors are identified by online quality checks.

And a prompt will be sent to you to acknowledge that your forms have been received, for added security.

Forms that are sent using online methods mean that the employee will be given the right tax code and will be paid the right amount of tax quickly.

This means fewer enquiries from employees to the employer about queries regarding their tax details.

To use the HMRC online return and forms, you can need to register to use the PAYE Online, for employer’s service on the HMRC website.

You will need to activate the service before you start to file. Ideally, allow yourself some extra time to do this, as it can take up to seven days to become activated.

The Online Return and Forms – PAYE service can be used to file up to 50 P14s. Forms P14s and P35 are filled online and then submitted to HMRC.

Can I mix and match the options?

You might however, prefer to mix and match the options available. A P45 could be sent using the internet with the help of software or by using HMRC’s online returns and forms PAYE product. The employer annual return could then be sent by an agent.

What are the penalties?

There is a penalty charge of between £600-£3000 if you are already required to file your payroll forms P35 and P14 online and fail to do so. The size of the fine will depend on the amount of P14 forms in your return.



Are you, like many other farms, missing out on tax claims for R&D?

If you’re a limited company, you could be eligible for tax credits if you’re carrying out R&D on your farm. For more information and to find out if you’re eligible visit our R&D tax credits page.

Find out more