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HMRC simplifies end of year payroll submissions 13 January 2015

Employers will no longer be required to answer extra questions on the payroll submissions they make to HMRC at the end of the tax year.

Under RTI employers running payroll are required to report their employees’ pay and deductions to HMRC in regular Full Payment Submissions (FPS) through the year. A final end of year FPS must be submitted by 19 April.

The seven extra questions, which are only included on the final FPS of the year, were inherited from the old P35 form, which had a submission deadline of 19 May. This gave employers and agents much more time to ascertain the correct answers to the questions, such as whether any special payments have been received in the year from third parties.

Welcome changes

The Association of Taxation Technicians (ATT) and the Chartered Institute for Payroll and Pensions (CIPP) have welcomed the changes.

Natalie Miller, President of the ATT, said: “The removal of the questions from the FPS is something the ATT has been championing for some time now, and we are pleased that HMRC have consulted and taken our comments and concerns on board.

“Many of the questions could not be answered correctly until after the tax year had ended on 5 April, so this really did squeeze the time employers had to submit the FPS into a very short period of 14 days. Otherwise it meant a further return via an Employer Payment Summary, when HMRC had promised that RTI would remove the need for an additional end of year return, and represented quite a burden being placed on agents and employers under RTI.

“Now freed of the requirement to answer these questions, employers should be able to file much quicker than before and hopefully avoid a backlog of submissions being made very near the deadline, which always makes an electronic system vulnerable to crashes and disruptions.”

A spokesman from the CIPP said: “The CIPP welcomes this reduction in admin burdens for employers and agents alike. Many CIPP members and members of the former ECF, now EPG, have requested that the questions on the final FPS be looked at. This was one of the biggest areas of contention as many believed the cost model showed a reduction in end of year processes and yet the ‘P35 questions’ seemed to remain.

“Removing the requirement to submit this information at year end will significantly reduce burdens on employers but will most definitely reduce burdens on agents and bureaux, and make a busy time of the year just a little less frantic by removing the mandatory need for the employer (client) to provide confirmation to the answers to seven questions.

“We acknowledge this to be a positive step forward in bringing about improvements to employer and business processes via RTI and very much hope that most software developers will be able to bring about adjustments in time to include for the 2014/15 tax year and thus minimise unnecessary work or confusion.”

The change is expected to take effect from 6 March 2015, avoiding the need to complete the checklist for the 2014/15 tax year.

From 6 March 2015 HMRC will accept a final FPS or EPS for 2014/15 and 2015/16 with or without a completed checklist, but employers should still report the Final Submission for Year indicator.

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