Penalty
Notices for Employers
HMRC have recently issued a considerable number
of penalty notices to employers for not submitting
their 2005/06 employer annual and contractor returns,
which were due for submission by 19 May 2006. HMRC
have stated that the reason for the long delay
in issuing the penalty notices was that:
“We wanted to ensure that we had taken account
of any returns we are still working. We took the
decision not to issue 2005/06 reminders for the
same reason. That work required extensive analysis
of our various systems. The delay and this analysis
has enabled us to avoid issuing a penalty notice
for any unprocessed returns.”
A large number of employers are maintaining that
a penalty is not due because returns have already
been submitted. It appears that some of the penalty
notices have been issued because employers e-filed
test returns thinking they had made a final submission
(test returns can be submitted in advance of a
final return and help employers to identify errors
in the returns). HMRC have confirmed that penalties
will not apply to those who filed test returns
thinking that they had made a valid final submission.
However it is important to appeal against any penalty
notices which have issued where the employer believes
that the notice was issued in error.
HMRC have issued penalty notices for £100
for every 50 employees and/or subcontractors for
each month they believe that the return has been
outstanding. The penalty is based on the employers/contractors
profile information received for previous years.
Penalties are not final because they cannot be
settled until a final return is filed.
Penalties will not apply if a return has already
been validly submitted and will also not apply
if there were no employees.
As a reminder the deadline for submission of this
year’s employer and contractor end of year
returns is 19 May 2007.
If you would like any help with your employer
and contractor end of year returns or have received
a penalty notice, which you believe has been issued
incorrectly, please get in touch.
Internet Links:
HMRC
guidance and HMRC booklet
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