The tax office has now begun to issue penalty notices to employers that have not filed their starter and leaver forms online in the period 6 October 2011 to 5 January 2012. The penalties for failing to file online range from £100 up to a maximum of £3,000 depending on the number of forms that should have been filed.

Penalty notices for not filing starter and leaver forms online are issued after the end of the quarters ended 5 July, 5 October, 5 January and 5 April. The requirement for employers with fewer than 50 employees to file their starter and leaver forms online was introduced on 6 April 2011. HMRC had confirmed that they would not charge penalties during the three quarters ending 5 July 2011, 5 October 2011 and 5 January 2012 but would issue letters to employers when they have not filed a form online. However, penalties will be triggered where an employer has incorrectly filed more than two forms on paper during the quarter to 5 January 2012.

The filing date for the 2010/11 annual return was the 19 May 2011. The Return including a P14 for each individual employee and a P35 summarising the entire workforce should have been filed by the deadline. The returns are now over 8 months late and HMRC have started to issue penalty notices where no return has been received. The penalty will be £100 per 50 employees for each month the return is outstanding for the period from 20 September 2011 to 19 January 2012. For a business with less than 50 employees the current penalty notice will be £400. 

Businesses that wish to challenge the current penalty notices have 30 days to appeal to the office shown on the penalty notice. Any businesses with outstanding returns are urged to submit them as soon as possible in order to avoid any further penalties.