HMRC has issued a reminder to all employers regarding changes to PAYE. From this year employers must file their Employer Annual returns online by 19 May 2010. There is no longer a paper filing option regardless of the number of staff employed.

To file online, employers must register with HMRC's PAYE Online service. Smaller employers can use HMRC's own free software to file their employee data online, while larger employers can purchase commercial software.

In addition to the complete move to online filing HMRC is introducing new penalties for late payment of PAYE, including Income Tax, National Insurance Contributions, student loan deductions and Construction Industry Scheme Deductions. Under the new penalty regime, employers may incur penalties if they don't make PAYE payments on time, and in full. The penalties will be calculated as a percentage of the amount paid late, and, for in-year payments, the percentage charged increases as the number of late payments in the year increases.

Employers who think they may have difficulty paying are asked to call HMRC's Business Payment Support Service, before the payment is due, on 0845 302 1435. If they do, and HMRC agrees time to pay, it will not charge late payment penalties – provided the business keeps to the agreement.

Further information regarding online filing, including a link to the registration page is available from the HMRC website www.hmrc.gov.uk.

More information on the new penalties can be found at www.hmrc.gov.uk/employers/paye-penalties-faqs.htm.