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Payroll services for charities


Friday, 27 April 2012

Changes to P35 penalty regime welcomed

In 2011 HMRC were hit by a huge amount of negative publicity from employers across the UK in respect of their treatment of penalities where late P35's were filed. Indeed they were accused of actively profiteering.

The rate at which P35 penalities apply is £100 per 50 employees for every month that your return is late and this remains the same for the 2011/12 tax year.

The cause of the upset for employers last year was that HMRC did not advise that the P35's were actually late until September. At this point the penalty for the smaller employers had added up to £400, significantly more for larger employers. This was deemed unacceptable by employers particularly because with computer systems at HMRC now being fully computerised the penalties were known by the 20th May.

Of course, it is an employers duty to file a return on time but there are many reasons why a return may be filed late or omitted altogether that are not deliberate.

Thankfully, HMRC have changed their process for the notifications over 2011/12 returns and have agreed the following process

  • 28th April - Employer Annual Return reminder
  • 31 May - HMRC will issue a "P35 Interim Penalty Letter" stating that a penalty has been triggered and what to do about avoiding the penalty increasing

Other changes being made include

  • Improving the online guidance for filing of returns
  • Employer helpline to advise new employers about filing deadlines
  • Going forward the information on the P35 itself will be improved

Dataplan Payroll Limited t/as Dataplan Charity, 1 Prince Albert Gardens, GRIMSBY, DN31 3AG.
Tel: 03331 123456 Email:

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