HMRC changes its approach to imposing P35 penalties

20 March 2012 | Guy Abbiss

Following its losses in a number of recent cases and discussions with professional bodies, HMRC has agreed to change the way in which it seeks penalties for the late filing of form P35.

P35s must be submitted by 19 May, following the end of the tax year. However, HMRC is unable to identify which taxpayers have not submitted P35s on time until September. As the penalties for late filing accrue at £100 per month, per 50 employees, by the time employers are informed they are liable to pay a penalty the penalty will be at least £400. (Many employers had mistakenly thought that they had successfully filed their P35s online and accordingly were not anticipating a penalty.)

HMRC has agreed to make the following changes to the P35 penalty process:

  • From 28 April HMRC will send out reminders to employers where it thinks that there are outstanding P35s.
  • It will send out interim penalty letters from 31 May, informing employers that they have incurred a late return penalty and what they must do to stop it increasing.
  • Improve their online guidance to make it clear what employers must do to correctly submit their P35.
  • From next year include information on the P35 and reminder letters informing employers that the first penalty notice covers a 4 month period.

For further information or to discuss the issues raised, please contact John Mooney or Stephen Wright on +44 (0)20 3051 5711.

Disclaimer

Content is for general information purposes only. The information provided is not intended to be comprehensive and it does not constitute or contain legal or other advice. If you require assistance in relation to any issue please seek specific advice relevant to your particular circumstances. In particular, no responsibility shall be accepted by the authors or by Abbiss Cadres LLP for any losses occasioned by reliance on any content appearing on or accessible from this article. For further legal information click here.

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To ensure compliance with requirements imposed by the IRS and other taxing authorities, we inform you that any tax advice contained in this article (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

The author

Guy Abbiss
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Employment Law
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