According to Northampton accountants Harris & Co, HMRC have issued a clarification on the criteria for registering a PAYE scheme as annual.
As stated in their “What"s New” item on 29 April 2013, to be considered as annual, a scheme must meet the following requirements:
•all the employees are paid annually
•all the employees are paid at the same time/same date
•the employer is only required to pay HMRC annually
To clarify, HMRC have now added that businesses not meeting this criteria, must report their PAYE whenever they pay their employees - on or before the time they pay them - using a Full Payment Submission (FPS). If an employer makes no payments in a particular tax month, they should tell HMRC by using an Employer Payment Summary.
If an employer’s scheme is registered as annual but they submit more than one FPS in the year, HMRC will automatically cancel the annual payer status for that year and following years. HMRC’s debt management processes will revert to expecting filing/payment on at least a monthly basis.
It is worth noting that in reviewing requests for a scheme to be treated as annual, HMRC will check the employer"s payment history to see whether such a request is appropriate. Employers requesting annual schemes where it is clear that they should be paying HMRC monthly will be considered non-compliant and liable to potential penalties.
HMRC’s “What"s New” item on 29 April 2013 has been published. The subsequent clarification is also available from