Online Payroll Service
What is it?
In 2001 the Government asked Patrick Carter to undertake a review of payroll services in the UK and look at how the system could be improved making it easier for the employer to meet their obligations and in doing so reduce the cost to themselves and to the economy.
His results were published in November 2001 and can be found on the Inland Revenue website
What are it’s implications?
In brief, the Inland Revenue have introduced compulsory filing of the Year End Returns. Employers will be categorised by the number of employees they have, assessed by a ‘snap shot’ of the data held by the Revenue at a specified time.
The deadlines imposed are:
No of employees in Paye scheme 1st year of compulsory filing Which return Deadline
250 or more employees 2005 2004/05 19th May 2005
50 – 250 employees 2006 2005/06 19th May 2006
Less than 50 2010 2009/10 19th May 2010
There are financial incentives for employers with less than 50 employees to encourage e-filing. These are:
• 2004/05 return £250.00
• 2005/06 return £250.00
• 2006/07 return £150.00
• 2007/08 return £100.00
• 2008/09 return £75.00
Total of £825.00 over the 5 years.
From the information we have received these incentives will be paid via credit to the Paye scheme you are operating.
To be eligible for the incentives, you must also ensure that the return is submitted:
• On time
• Electronically
• Meeting quality standards
• Fully and correctly
Penalties of up to £3000.00 per annum have been introduced for the employer’s failure to make an electronic End of Year return when they should have done so. These are in addition to to the existing penalty for late submission.
What should I do now?
If you currently operate an in- house payroll system, you need to decide the service which best suits your company’s needs – Internet service for PAYE or EDI. Internet service for PAYE will be quite sufficient for the majority of existing Paye schemes, including all those administered by Pamil. However for, very large numbers of employees EDI would be the preferred option to ensure large files are transmitted successfully. The largest file that can currently be submitted via the internet is 25mb (approximately 20000 P145’s) so employers larger that this should be looking at EDI. In either case, existing hardware and software should be reviewed and upgraded as necessary. Communication with your IT personnel at this stage is crucial.
If you use a payroll bureau or agent, it would be prudent to obtain confirmation from them that they are ready for e-filing and all software has Inland Revenue approval.
Please note that we are compliant and approved!
The next stage is to register as an employer. This can be done on-line via the Government Gateway or by completion of an FBI 2 form. The Government Gateway is the centralised registration service for e-Government services in the UK.
There are easy to follow steps if you want to use the Internet Service for PAYE
• Register with the Government Gateway
• Enrol for the PAYE End ofYear Returns for Employers service
• Receive User ID and/or Activation PIN through the post
• Activate the service
As an employer, you register as an ‘organisation’ and will be asked for the following:
• Your name – use your own name rather than the a business name
• An e-mail address through which the Government Gateway can contact you
• A password of your own choosing ( please keep this safe!!)
You will then need to enrol for the PAYE Internet Service for Employers where you will be asked to provide:
• Tax Office Number
• Employers Paye Reference No
• Accounts Office Reference
You will find all this information on your yellow booklet.
To find out how we can be of service to you, please contact your nearest office or complete the enquiry form below.
| London t: 44 (0)20 7387 5868 |
Solent t: 44 (0)1489 566 700 |
| Portsmouth t: 44 (0)23 9275 4820 |
Thames Valley t: 44 (0)1753 759 000 |
