PAYE Late filing

PAYE Late filing

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For many years I was self employed with my wife as the only employee. She worked part time and was paid at LEL level to avoid any involvement with PAYE.

Tax inspector told me there was no need to set up a paye system and make returns as no tax or NI was payable by her.

Now she has retired and finds that no sredits have been given to her towards pension.

I am tols that I would have to register for PAYE in retrospect (even though no longer trading) and submit annual returns for all the years so she can get her pension credits.

They have also said that there could be penalties for late filing.

Can anybody tell me whether penalties would be made and how much. Would I be able to successfully appeal against them.

Replies (2)

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By Steve Knowles
09th Mar 2012 16:35

You can't have it both ways

Either you avoid the paperwork, in which case you wife gets no credits, or you do the whole lot. What you were told was technically correct, in that there was no requirement to set up a PAYE scheme, so you can have no comeback there.

As regards back years, there should be no penalties for years up 2009/10, as no payments were due, but there are new rules for 2010/11 and onwards, and your only excuse would seem to be that the returns had not been requested - might be worth a try.. However I'm not sure how much pension your wife would get for the few years you would be able to do the returns - you can't go back indefinitely.

If you are approching pension age yourself would she qualify for a dependant's pension? Suggest your (her) first step should be to get a state pesnion forecast from the DWP, then you have a starting point.

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By petersaxton
09th Mar 2012 21:35

What did your accountant recommend?

Your accountant would have given you better advice.

How many years has your wife got credit for? Will voluntary contributions make up the difference?

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