What is Online Filing?

Online filing was introduced by the Government in 2002, as a means of sending Employers’ Annual Returns (P14s and P35) electronically, eliminating the need for paper returns.

This initiative became mandatory for large employers in 2005, and will be followed by medium-sized employers in 2006. Small employers do not have to start online filing until at least 2010.

The dates you need to start filing your returns electronically are determined by the number of employees in your company:

Large employers (250 or more employees in each PAYE scheme) are already required to file online - legislation came into force for their 2004-05 returns

Medium-sized employers (50-249 employees in each PAYE scheme) must file their 2005-06 returns online by 19 May 2006

Small employers (49 or fewer employees in each PAYE scheme) do not have to start filing online until at least 2010, however, generous tax-free payment incentives are available for those who begin online filing earlier

How Will I Benefit?

Amending your payroll procedures and changing the way you work may seem like a big overhaul, but there are many benefits. Any work you put in, or systems you change, will ultimately lead to a much greater return on that investment. Benefits of online filing will outweigh any investment required to get you started

Advantages...

secure and convenient

quick and easy

saves time and money

encourages a paperless office

reduces administration

reduces mistakes and misinterpretation

helps you to run your payroll more efficiently

How do I File Online?

There are two ways you can file online:

Use payroll software capable of filing your return electronically via the secure HMRC PAYE Online for Employers Internet Service

Use an intermediary, for example a Payroll Bureau, who can file online on your behalf

Using the Right Software

If you want to use your payroll software to fulfil your online filing commitments, you must ensure that it is capable of sending your data electronically and that it meets HMRC Quality Standard.

If you are unsure, please check with your software supplier to ensure the payroll software you use is capable of meeting your online filing obligations, and meets HMRC Quality Standard.

Using an Intermediary

If you use an intermediary, they may be able to fulfil your online filing requirements. However, you will still be responsible for ensuring that your return is filed on time and meets HMRC Quality Standard. If you are a small employer, you will still qualify for the tax-free incentive payments if an intermediary files on your behalf.

HMRC Quality Standard

Only software that meets HMRC Quality Standard will check the validity of your data prior to the electronic submission, specifically:

the entries are correct

they are in the correct fields

and they all add up

Once you send your returns electronically, and these successfully meet HMRC Quality Standard, an on-screen message will be displayed to advise you of the successful submission.

The Quality Standard should be built into your payroll software. Your software supplier will be able to advise whether the payroll software you are using meets this standard.

HMRC Payroll Standard

The HMRC Payroll Standard Accreditation logo is awarded to payroll software products that satisfy the requirements of the Payroll Standard.

This ensures the software has all the features you need to work out PAYE, National Insurance contributions, Statutory Payments and many more payroll essentials.

While this is not a mandatory accreditation for online filing, you may want to check if your payroll software meets this standard to ensure you are deploying the most up to date payroll technology.

For further details of the Payroll Standard, please visit: www.hmrc.gov.uk/ebu/acclist.htm