HM Revenue and Customs say that they are issuing interim penalties for outstanding 2006-07 Employer Annual Returns from 24th September 2007. Penalty notices will be sent out where records show that 2006-07 Employer’s Annual Return (P14s and P35) and 2006-07 Contractor’s Annual Return (CIS36) which are due have not yet been received.

These returns were due by 19 May 2007. The penalty is levied at £100 per 50 employees and/or subcontractors for each month a return is outstanding, as at 19 September 2007. If the return has not yet been filed that already amounts to £400.

HMRC’s advice is to send in outstanding returns, or if no return was due and a penalty is issued employers have 30 days to appeal.

Late returns will still attract an online filing incentive, if an employer has fewer than 50 employees, and submits the return online, they will still get £150 tax-free, even though the Return is late.

HMRC will be sending out further interim penalties later in the year where any return remains outstanding, and final penalties on receipt of a late return.

Last year HMRC did not manage to issue penalties until the following March, by which time the average notice totalled £900. This caused howls of criticism from the accounting profession who saw the delay in HMRC’s processing of PAYE and CIS returns as another indication that online services were anything but “robust”.

Only time will tell whether most of the latest penalty notices have been issued accurately. However, judging by comments made in the the outlook is not too positive...