North West-based businesses face up to £3,000 fines, warns accountants

Date: 21 September 2009

TIME is running out for businesses with 50 staff or more to start filing information online to HM Revenue & Customs or face potential fines, warns a payroll expert.

North West Chartered Accountants and Business Advisors Mitchell Charlesworth is urging (North West) businesses to review their software to ensure it can submit details to HMRC of employees who have started or finished working for them.

All businesses now have to file future Employer Annual Returns to HMRC online.

The new legislation introduced on April 6, 2009, replaces the longstanding system of submitting paper forms, such as P45s, to HMRC.

However, HMRC will start issuing the first penalties in April 2010, which will be backdated to January 2010. The penalties will range from £100 up to £3,000 based on the number of paper forms HMRC receive.

Ken Davies, payroll manager at Mitchell Charlesworth, said: “The best advice is to start looking at systems now so that any problems can be resolved before HMRC starts issuing penalties. Basically, businesses need to ensure their payroll software is up-to-date and capable of submitting forms P45 and P46 online to HMRC otherwise companies could face fines of up to £3,000.”

Businesses with less than 50 staff do not have to file starter and leaver information online until April 2011 – although they still have to submit their Employer’s Annual Return online.

Ken added: “If a company’s software cannot submit P45 and P46 online, then they need to familiarise themselves with the HMRC web portal that allows them to key in starter and leaver information. If their payroll is outsourced they should also ensure their provider will file their returns online. Unless businesses are prepared they may incur fines without even being aware of the new legislation."

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