Annual coding

We are continuing to engage with you as employers, pension providers and payroll providers on the most effective way to deal with the annual coding issues and welcome you alerting us to how this is affecting you. I am pleased to be able to let you know about something further that is being planned to help. The Prudential has offered to second a member of their staff into HMRC to work with us predominantly to drill down and analyse the reasons for data mismatches from the employer perspective in the context of our respective processes. We plan for this work to start in August when we have had time to gather more information from the current end of year PAYE process. The thrust of this will be sustainable data cleanse and on us making the most of learning first hand from each other.

Online filing for employers with five or fewer employees

We have become aware that some of you may have received messages from other sources suggesting that employers with five or fewer employees are not mandated to file their end of year return online.

I can confirm that no concessions have been made and that the requirements remain as determined by the Regulations that came into force on 13 August 2009 (Statutory Instrument 2029/2009). Under these Regulations, all employers are required to file their 2009/10 Employer Annual Return online by 19 May. We expect them to do this.

The only exceptions to this are certain “care and support” employers and practising members of religious societies whose beliefs are incompatible with the use of electronic communications.

The Regulations also determine the penalty that may be charged where an employer does not act in accordance with the Regulations. For employers with 1-5 and 6-49 employees the Regulations provide that the penalties are reduced for the tax year ending 5 April 2010 to £nil and £100 respectively. For subsequent years the penalties that may be charged for non compliance with the Regulations are £100 and £300 respectively.

Should an employer with 1-5 employees not file their 2009-10 Employer Annual Return online as required by law, we will write to them, remind them of their obligations and explain where they can get further help and guidance to ensure they file their return correctly in future.

Our guidance has always made the position clear. That is, employers must file their 2009-10, and subsequent, Employer Annual Returns online. Those who fail to do so may be charged a penalty.

Contacting HMRC Helplines

I know that many of you have had problems contacting HMRC recently. From the outset please accept my apologies for the problems you have experienced. Ideally, we would like to answer all calls as soon as they are received, however it is not always possible to meet the demand of callers.

Our Contact Centres have been working hard to maintain a good customer service and we have been using our staff flexibly to help manage this peak in customer demand, by distributing calls around our network of contact centres. At a Head Office level, we are looking closely at what can be done to maintain and improve the level of service provided. There should be no restriction on the number of enquiries a customer has during the call with the aim of dealing with all enquires at that first point of contact.”

Source: HMRC Notification.