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PAYE51040 | Employer returns: employer EOY penalties: handling EOY interim penalty enquiries

From HM Revenue & Customs · PAYE Manual

At the end of September, January and May following the 19 May deadline, HMRC issue interim penalty notices for outstanding Employer Annual Returns (forms P14 and P35). These penalty notices are issued to employers who HMRC believe should have sent us a return but no return is indicated on our computer systems at the date of the penalty run.

There may be an increase in telephone enquiries from employers following the issue of interim penalty notices.

When handling employer enquiries received by telephone you should try and obtain the answers to the following questions from the caller. This will ensure the correct action can be taken with the penalty and the employer record can be updated without the need for additional contact with the employer / agent.

Questions

Question 1. Is the return due for the most recent closed year?

No

If the employer ceased before 6 April this year we do not need a return. Tell the caller to write to the office address shown on the penalty notice and state

  • The penalty is not due

  • The date the employer ceased in business

Yes

If a return is due, go to Question 2 below.

Question 2. Has the complete return been sent to us?

No

Advise the caller to send the return without further delay.

Tell the caller that the penalty is correct and they must send their complete return as soon as possible to limit the amount of the final penalty that will be calculated on receipt of the full return.

Yes

If a return has been sent, go to Question 3 below.

Question 3. If the P35 and forms P14 have been sent separately, have all parts been submitted?

No

Advise the caller to send us the remaining part or parts without delay.

Tell the caller the penalty is correct and they must send the remaining part(s) as soon as possible to limit the amount of the final penalty that will be calculated on receipt of the remaining part(s).

Yes

If the employer has sent all the parts they expect to, advise the caller to send a written appeal to the Customer Operations office stating when the return was sent to us, what medium was used (Internet, EDI, paper) and why they consider that the penalty notice is wrong.

Next action

See the Action Guide ay PAYE51041 on receipt of a letter from the employer

  • Confirming the employer ceased before 6 April this year

Or

  • That a complete return has been submitted