HMRC’S ‘fix’ to the problem with annual PAYE schemes will now take place in July.

An annual PAYE scheme is one where employees are paid only once a year.  An easement means that such schemes do not need to submit nil Employer Payment Summaries (EPS) for the 11 months during which no-one is paid, but only one Full Payment Submission (FPS) for the month of payment.

There is a problem in registering new schemes as annual, and HMRC will make an announcement via its What’s New webpage when the fix is done.

Once the fix is done it will be possible once more to register PAYE schemes as annual.

In the meantime, it will not be possible to register schemes as annual and employers and payroll agents will need to submit nil EPS in respect of the months in which no-one is paid.

As a reminder only the following schemes will be accepted as annual:

  • All the employees are paid annually; and
  • All the employees are paid at the same time/same date; and
  • The employer is only required to pay HMRC annually.

Employers who do not meet these criteria must report whenever they pay employees, generally on or before the time that they are paid, using FPS.  If no payments are made in a particular tax month employers should tell HMRC by using an EPS.

If a scheme is registered as annual but the employer submits 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.

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