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Guides: Payroll

An Employer's Guide to Payroll

Payroll Guide Contents > Payroll filing & payment of PAYE

3. Payroll filing & payment of PAYE

Payroll Year End

The Payroll year is the tax year to 5th April.  Immediately following that year end, and subject to strict time limits and severe penalties, Annual Returns must be prepared and submitted summarising the operation of the payroll for the year and P60 Annual Certificates of Pay and Tax Deducted issued to all employees current at the tax year end.

Online Filing of year end returns and in-year forms

Online filing has become mandatory for all employers since 5th April 2010. In-year forms such as P45/P46’s (leavers & joiners) must now also be filed online. Our service undertakes all necessary filing for you.

Payment of PAYE

The sums of tax and employees’ NI deducted together with the employer’s NI contributions are paid over monthly (or quarterly within certain limits).

We send you out a payslip completed with the appropriate sums for you to pay over to the Inland Revenue.

PAYE must be paid over by the 19th of the month following if paying by cheque and by 22nd April if paying electronically.

Penalties and Interest for late payment

With effect from 6th April 2010 penalties have been imposed for late payment. A percentage penalty is applied to the amount of PAYE not paid over on time. The rate is set by the number of times that the employer has been late and the length of time the payment is overdue.

There is no penalty for the first late payment in the year but thereafter the penalty is geared between one and four per cent. There is an a additional five percent penalty if an amount is outstanding for 6 months and a further five percent if the sum is not paid for 12 months.

In addition to penalties for late payment, interest at rates set by the Treasury may also be charged with effect from 5th April 2012. The distinction is that the former is a fine for non-compliance; the latter is restitution for interest lost.

Employer's Security Deposits

Employers with a history of serious non-compliance may be required to put up a security from which to meet unpaid PAYE liabilities in the event of default. The amount of the security demanded will be set by HMRC in the light of the potential tax liability i.e. the size of the payroll.

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Disclaimer

While we hope the above has been found to be useful it is intended only as a general guide, may not reflect the very latest developments in law, and cannot be a substitute for professional advice. We cannot accept any responsibility for loss occasioned to any person acting or refraining from acting as a result of material contained in this guide.