HMRC To Close Inactive PAYE Schemes

HMRC have announced via their website that they will be closing inactive PAYE schemes. All employers whose records show that their schemes have been inactive for more than 120 days will be notified by letter from October 28 2013.

These closures only apply to schemes opened on or after 6 April this year and ones that aren’t registered as annual, according to the Institute of Chartered Accountants in England and Wales. However, considering the problems businesses had getting their schemes registered as annual earlier in the year, there might be cause for concern. In July, HMRC stated that it would accept requests from employers to switch to an annual scheme, but would not notify employers if a change had been made.

Therefore, some employers and their payroll agents may still not know whether their businesses have the go ahead to pay employees annually and may be submitting an Employer Payment Summary (EPS) every month as a precaution, even though no payments are being made. Under an annual scheme an EPS would only have to be submitted once every 12 months. There are also agents and employers who use PAYE schemes solely as a way of applying for P11D dispensation or to report benefits, who could be affected if they have not transferred to annual schemes.

For further clarification on where your business stands you can call HMRC’s employment payment helpline or the employer helpline, though it can take a long time to get an answer.

To find out more about payroll and businesses’ obligations under HMRC’s Real Time Information (RTI) regime, speak to a specialist adviser from Alexander & Co.