HM Revenue & Customs have released details of a new podcast that will detail all changes (to be implemented from April 2009) that will affect the UK PAYE system. Lasting approximately 5 minutes, the podcast features the HMRC Business Customer Unit Director Stephen Banyard, who speaks about the changes that larger businesses operating within the UK can expect in terms of filing necessary PAYE documents. The podcast can be found by clicking on the following link and selecting PAYE-in-year filing: http://www.hmrc.gov.uk/podcasts/

What changes will there be to the current UK PAYE operation?  One of the biggest amendments this year is that any company with 50 employees or over will need to start filing all in-year documents online, from April 2009. The same will apply to smaller organisations in terms of online filing but this will not be enforced until April 2011.

How will this affect me? 
For those businesses with 50 employees or more, the list of documents which will require filing online includes:

• Part 1 & Part 3 of the P45 form
   
• The P46 form
    
• A replacement for the current P160 and PENNOT forms will come into circulation in April 2009 and will be known as P46 (Pen)
    
• One new form that is to be introduced in April 2009 is that of the P46 (Expat) document.

There are already some key forms which are required to be filed online and they are, the Employer Annual Return, the P14 form & the P35 document. Severe penalties (which can range from £600 to £3,000) can be enforced if any of the above documents are not filed online. The total penalty will depend entirely on the number of P14 forms that were included in the Employer Annual Return.

New P45 forms 
Another new change to the UK PAYE system that will commence from the 6th April 2009 is the introduction of new A4 P45 forms. At the present time, businesses will be allowed to use the current documents but on and after the deadline date, all organisations will be required to use the new format forms.   Should you require any of the forms listed here then these can be found online from the HMRC by clicking on the link below: http://www.hmrc.gov.uk/employers/emp-form.htm

Not filing online? 
If your business has not yet started filing online then it is important to begin doing so, sooner rather than later. It is easy to do and by first registering for the online HMRC PAYE service by clicking the following link, you will then need to select “PAYE for Employers”.  

http://www.hmrc.gov.uk/ 
Simon Lidster at the HMRC spoke about filing in-year forms online and the overall benefits it can have on businesses:

"Filing in-year employee information online is quick, easy and convenient. As well as avoiding postal delays, the information is processed much faster by HMRC. This means employees' records and tax codes are updated more quickly, and they are much more likely to have paid the right tax at the end of the tax year.”

"If you're a large employer, it's a good idea to get online now, so you'll be well prepared for the changes."

Overall, the current UK PAYE system is successful but with the enforcement of online filing, this will make everything a whole lot simpler for both smaller and larger businesses across the country.

1st Contact Tax offers specialist tax services to contracting professionals.
These services include: Contractor Accounting, Contractor Umbrella payroll, Personal Tax for Contractors, Limited Companies for Contractors and Contractor Financial Advice.