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HMRC have commenced issuing penalty notices where their records show that employers have not yet sent their 2006-07 employer’s annual return (P14s and P35) and, where due, a 2006-07 contractor’s annual return (CIS36).

This next round of penalties is a follow up to the penalties issued in September 2007 and January 2008.

The returns for which the penalties are now being issued, were due by 19 May 2007. The penalty will be £100 per 50 employees and/or subcontractors for each month the return is outstanding, from 20 January 2008 to 19 May 2008.

Employers who had less than 50 employees, and have to send a return (because they have tax, National Insurance or Student Loan information to declare) may still file their return online and they will still get a £150 tax-free incentive payment, even though the return is late.

Employers should contact their HMRC office and tell them if they do not have to make a return for 2006-07 ie, they had no employees during the year. This will help HMRC to update their records and prevent further penalties being issued. HMRC will also cancel any penalty already issued and notify the employer accordingly.

Employers who believe the penalty notice is incorrect should appeal, in writing, to their HMRC office within 30 days, stating why they think the penalty notice is wrong.