Employers’ Annual Return Form P35 – Is a Return Actually Due?

Although the P35 deadline is looming it is clear that in some cases although there is no need to submit a form, however, employers will face penalties if they do not do so reports Taxation Web.

For instance:

  • The business (such as a sole trader or partnership) used to have employees but not in the 2011/12 tax year – but the PAYE Scheme itself was ‘open’ in 2011/12; or
  • The business has Construction Industry Scheme (CIS sub-contractors operating for it but no actual employees – a PAYE reference is required in order to manage CIS payments but there is no actual PAYE liability per se.

HM Revenue & Customs has confirmed that, in neither case is a Form P35 required and no penalties are due if one is not received – however penalty notices will nevertheless be issued automatically, which would then need to be appealed.

HMRC recommends that if a business doesn’t need to make a P35 submission and wants to avoid the rigmarole of dealing with unnecessary paperwork, it can make use of an online facility to advise HMRC at – Notifying HMRC if You have No Employers’ Annual Return to Make.

As HMRC says in its guidance, “If you haven’t had to maintain any forms P11 during the tax year you don’t need to complete an Employer Annual Return – but you do need to tell HMRC that you won’t be completing one. If you don’t, [we] may send you unnecessary reminders or penalty notices.”