The new accounting year has already started in the UK, but there is one last task that needs to be done: your employer annual return. By May 19th you will have to submit your return, which sends shivers down the spine of all but the most accounting-savvy. However, salvation is at hand because this will be the final year for submitting an annual return in this manner; from next year onwards it will be an automatic process.
The annual return
If you are a business owner in the UK then you will know all about annual returns. This has to be sent to HMRC to let them know how much you have paid your employees, including yourself, during the past year. It should show money that is paid as salary and bonuses along with details about how much tax and national insurance has been deducted from each employee’s pay-packets.
You or your accountant will have to fill out more than one form; the P14 and the P35. These cover wages, tax and national insurance information, while benefits for employees are covered by a third form which is the P11, which can be submitted later in the summer.
What happens to annual returns in 2014?
From next year, you will not need to submit annual returns, which is great news! This is possible because all PAYE (Pay As You Earn) data will be shared with HMRC electronically under the new RTI (real time information) scheme that began earlier in April all across the UK. This new system sends all the information you usually find in an annual return, through to HMRC automatically. Every time a company’s employees are paid, HMRC records all the details. This means that there is no need for an annual return after 2013, which should make things easier for employers and accountants alike.
In theory, all companies in the UK should already be using the RTI system as it became mandatory when the new tax year began on April 6th. If you are unsure about this, make sure you contact your accountant immediately. Chances are they are already taking care of it for you, but you should certainly make sure. All decent accountants should offer an RTI service as part of their payroll and PAYE returns service, such as this one from PL Accountants in Liverpool.
Handing in your annual return
So, this is the final time that companies or their accountants need to download and fill out these forms. For many businesses, their accountant can guide them through every step of the way and file the return for you. In fact, if you have kept your accountants updated on every aspect of employee payment and expenses, they may deal with the entire process. Smaller businesses may need to get a little more involved, as they are unlikely to have a large accounts department at their disposal!
To find out more about filling in your employer annual return, check out the full guide on HMRC’s website.
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Written by Phil Charnock – Visit Phil Charnock on Google Plus