P35 penalties apply at a rate of £100 per 50 employees for each month the return is late. Only a few dispute the level of the penalty but what angered the employers last year was that HMRC did not advise that the P35's were actually late until mid September when the penalty for even the smallest employers had racked up to £400. This is despite the computers systems at HMRC now being fully computerised and being able to tell by the 20th May who was late.
Yes it is an employers duty to file a return on time but there are many reasons why this oversight was not deliberate and this angered the employers.
Thankfully, HMRC have changed their plans for 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