From today employers will be able to
register for the Inland Revenue's new File by Internet (FBI) service
for Pay As You Earn (PAYE) tax returns for their employees. Whilst the
internet service for personal tax returns was only used by ½% of
relevant taxpayers for 1999/2000 it is likely that the new PAYE
service will be more successful.
Keith Pike, technical Director at i.e.
taxguard, explains "Smaller employers feel the pressure of tax
paperwork so any way to speed it up is attractive. This new service
will also allow employers to authorise their accountant to use the
service on their behalf". Another factor is the £50 discount
that the Inland Revenue is offering for those who use the service and
pay the tax by electronic means: rather more of an incentive than the
£10 offered to individuals.
Employers have to register at the new
Government Gateway (www.gateway.gov.uk) to either use the service
themselves or authorise their accountant (the accountant will need to
have registered first). To register, each employer will need to enter
their tax office number and reference, their Collector of Taxes
reference, their own contact details and then choose a password. The
Inland Revenue will then send a personal identification number to the
employer's business address by post: this must be used within 14 days
to "activate" the service.
From 9th April employers who have
activated the service can use it to submit their PAYE returns (P35)
and other end of year forms for the 2000/2001 tax year, making it
easier to meet the 19th May deadline for the return. Later in the year
the service will be extended to other PAYE forms including P46s (the
employer's version of the dreaded P45) and P11Ds for benefits in kind.
Mr Pike says that i.e. taxguard will be
registering as an agent and encouraging their clients to register to
claim the £50 discount.
Using the Government Gateway as the place
to register for this new service is the first step to creating an
online "portal" for all communication between businesses and
government departments. The government's new target is for employers
and individuals to be able to carry out 100% of communication with
government departments online by 2005.
Despite this target the Inland Revenue
says it is committed to retaining a paper based communication route in
the long term. However, Mr Pike commented "With the Chancellor
adding ever more complexity to tax calculations (perhaps on the
assumption that most are done by computer!) small businesses using the
pen and paper method will struggle to keep up".
For further advice on payroll issues i.e.
taxguard can be contacted on 0800 975 9010.