Employer PAYE returns: common errors

The deadline for filing your Employer PAYE end-of-year returns is mid-May. To make sure you get the best out of online filing, SmallBusiness.co.uk and HM Revenue and Customs (HMRC) have put together this list of common errors to help you avoid making the same mistakes.

Avoiding common errors

Invalid National Insurance (NI) number format – Employers must use the correct NI number with an acceptable prefix (as published in the ‘Quality Standard’ each year) and a valid suffix (A, B, C, D or space).

If the NI number is not known, complete the date of birth and gender fields and leave the NI number field blank. Enter 01011901 in the date of birth field if the actual date is not known. Do not use temporary numbers beginning with TN, or ending in M or F.

National Insurance earnings – To avoid errors relating to earnings recorded on the P14 for National Insurance find guidance on how to complete the P14: Payroll publications for employers .

National Insurance contributions (NIC) table letters – If the NIC table letter is X – the entries at boxes 1a-1e of the P14 must be zero. If it is A, D, F, H, J, L, N, Q, R, S or V, the entries at boxes 1a-1c of the P14 must be greater than zero.

Employer PAYE references – A valid PAYE reference is unique. It is created from a three-digit HMRC office number and an employer PAYE reference. For example, if an HMRC office number is 913 and the employer PAYE reference is WZ51258, then the correct way to quote the employer reference is 913/WZ51258. Do not show the PAYE reference only (WZ51258) or duplicate the HMRC office number (913/913WZ51258).

Register for online services– If you want to send your return yourself, you must register for and activate PAYE Online for Employers – Internet service. Register as soon as possible because it can take up to seven days to get your activation PIN and your return is due by mid-May. Click here.

Test ‘acceptance’ messages – You can test the information that you want to send from third party software by sending a ‘test in live’ file (if your software lets you set a test flag). You can also use ‘test in live’ to check some of the information you want to send while you are waiting to finish your return.

You will get acceptance or rejection messages from the Government Gateway and HMRC when you send your test. These messages are exactly the same as you will get when you send your return for ‘real’.

Remember, if you send a test return without the test flag and we accept it, we will treat it as your return for the current year. So, always set the set the test flag for a test return and remember to remove it before you send your real return.

Part submissions – Employers wanting to send their return in parts must use software that enables you to do so and only send one P35. Or, they must use software with a consolidation utility option that combines all the P14s from several branches or payrolls into one submission. The combined submissions (all P14s plus only one P35) are sent to HMRC as a ‘complete’ submission. Contact your software providers to see what part submission option is available.

Each part return of P14s must have a unique identifier number. Different P14 parts which use the same reference number will overwrite each other. This will cause the P35 to show incorrect figures and will lead to the return failing the final Quality Standard check and being rejected.

The P35 must only show the number of uniquely referenced P14 parts that are being sent, which must not include the P35 or any P38A. Do not show the actual number of P14s being submitted.

Claim you tax-free payment from the right year – The quickest and easiest way to get the tax-free payment is to deduct £150 from your PAYE payment(s) to us for the tax year. You can do this if you get the message saying ‘9004:The EOY return has been processed and passed full validation.’ Remember to do this for your next year’s payment, not for the current one.

For details on how to achieve hassle-free filing and to get general help with online filing, visit: www.hmrc.gov.uk/efiling/help/mainhelp.htm or call the HMRC Online Services Helpline on: 0845 605 5999.

See also: How to file Employer PAYE Returns.

Adam Wayland

Adam Wayland

Adam was Editor of SmallBusiness.co.uk from 2006 to 2008 and prior to that was staff writer on sister publication BusinessXL Magazine.

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