Employer returns: employer return - quality checks: introduction
An employer must only send an Employer Annual Return if they had to fill in at least one Deductions Working Sheet (P11 or equivalent) during the year. By law, they only need to complete a Deductions Working Sheet where
- An employee had given them a P45(3) with a date of leaving in the current tax year
- They pay someone at or above the Lower Earnings Limit
- They deduct tax on earnings
- They have received a code for an employee or director and they operate it against their pay
Where an employer is not required to fill in at least one Deductions Working Sheet, they must contact their HMRC office (by phone or in writing or by an online structured email form, the online e-mail form can be found on the HMRC website under ‘Notifying HMRC if you have no Employer Annual Return to make’) as soon as they can and tell us that they are not sending a return.
A limited company may need to report an amount in the ‘CIS deductions suffered’ box and they will need to send in a P35, even if all the other boxes of the form are ‘nil’.
Where required an employer and (for years up to 2006-07) a contractor must submit an annual return to HMRC. The return is a summary of
- Tax and National Insurance deductions made from employees and subcontractors
- Total payments of tax credits made to certain employees
- Student Loan deductions made from employees who are student borrowers
The return and relevant enclosures must be submitted on an official employer annual return to an office responsible for processing by the due date following the end of each tax year. No substitute forms will be accepted. That date is 19 May. If the return is not received by that date penalties under S98A(2) TMA 1970 will automatically accrue.
It is not HMRC policy and there is no statutory obligation to acknowledge the receipt of employer returns. Further information is provided in subject ‘Acknowledging employer returns’ PAYE40010.
Returns that are required at other times, for example for a period to the date of cessation will normally be sent to the local Debt Management Office who will apply the paper quality standard checks to the returns and either accept and record receipt of the return or return it to the submitter with a failure letter.
Forms P228 relating to these returns are printed in early April and sent to the relevant DMB office.
The return and its associated form P228 will then be sent to the Processing Office in early April to forward the forms P14 to NICO and capture the return.
There are different types of return and some employers may submit more than one return of the same or different type in any year.
From April 2005 returns for year 2004-05 can be submitted in parts when they are filed online or use Magnetic Media. If an employer intends to send the whole return by paper, then the return must be submitted as a complete return and not in parts.
On the date of receipt the processing office must
- Date stamp the returns that are received
- Make the paper quality standard checks to ensure that the return or return part received is completed correctly
- Deal with any payments sent in with the returns
- Record the date of receipt of all parts of employer returns, which pass the quality standard checks, on the Employer Business Service (EBS) computer (except in-year returns that must be referred to the Debt Management Office)
Paper Quality Standard checks
Each return must then go through certain quality standard checks prior to recording receipt. These checks determine
- Whether the return has been made on correct stationary
- Whether the entries on the return are clear and legible
- If any action is required by the processing office before the return is recorded as received
- The type and classification of the return
For more information see subject ‘Paper quality checks’ PAYE40050.
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Record Return Receipt
Details of how to record the receipt of a return are given in PAYE41000 onwards.
Data Protection Act
The provisions of the Data Protection Act 1998 (DPA) apply to employer records in the same way as they apply to taxpayer records on other HMRC computers.