Having embraced the Real Time Information (RTI) process for the first time in 2013/14, employers will be hoping that their PAYE year end processes will now become much more straightforward. The previous annual return forms (forms P35 and P14) are no longer now required under RTI. Instead HMRC will itself collate annual details of each employee’s pay tax and NIC, from the ‘Full Payment Submissions’ (FPSs) already made ‘in year’ by the employer.
The employer will still be required to send a ‘Final Submission’ to HMRC once all FPS returns for the year have been done. This is broadly based on the end of year questions formerly included within the previous form P35. However the numbers and complexity of the questions appear to be much reduced, therefore the process should be much simpler.
Perhaps the most important aspect will therefore be to ensure that all FPS submissions for the year have first been submitted. Many employers have in the past tended to make informal ‘Month 12’ adjustments to their PAYE/NIC records, around about the end of the tax year. Unfortunately such practices do not fit in comfortably within the RTI process, requiring an FPS return ‘on or before’ each payment. HMRC has stated that it would still be possible to file an amended or ‘revised FPS’ on or before 19 April 2014. After that date, corrections would still be possible, using what is referred to by HMRC as its ‘Earlier Year Update’ process, though such updates would have to be filed by 19 May 2014 to avoid any risk of penalties for late submission (in effect, the same deadline as for the outgoing form P35).
HMRC has taken to YouTube in an attempt to explain the new process. Unfortunately we found this rather long winded (perhaps taking its lead from watching the Oscars ceremony – imagine a couple of minutes of entertainment ‘crammed’ into several hours of TV, as they say!). If you do require more practical assistance, you can also refer to the written guidance in the Employers Bulletin issued last month, call the HMRC Employer Helpline directly, or of course contact ET4B.
Other employer P11D and Class 1A (P11D(b)) returns will still of course be separately required, by the normal timescales of 6 July and 19 July 2014 respectively.