Employers face penalties despite filing tax returns

A number of employers have been falsely accused of failing to meet statutory deadlines for filing staff tax returns for 2004-05 and warned incorrectly that they face penalties, it emerged last week.

The problems have arisen be-cause the government has delayed the introduction of an online pro-cessing system for tax returns.

Mandatory online filing of employee tax records for organisations with more than 250 staff came into force in May.  Companies were threatened with penalties of up to £3,000 if they failed to file employee records by 19 May.

The deadline was extended to 26 May. But companies that had filed online in time found that the Revenue & Customs department could not process their returns on the new system.

Without the system, many tax staff have been unable to see whether employers have filed their annual returns on time, or should face penalties.

In an internal e-mail, leaked to Personnel Today’s sister publication Computer Weekly, the Revenue told tax employees to stop asking employers for tax returns.

“We have become aware that employers are being approached for their return and/or being warned of penalties for filing late. Until further notice staff must not approach employers for their [tax] return,” the e-mail said.

Some companies have been told by the Revenue that their returns have been correctly validated. But the department said it may have to contact them if it has queries, even though employers will have closed their files for 2004-05.

The department and its IT supplier Capgemini told Computer Weekly they had delayed going live with the system because they wanted to put the equipment through further tests.

This could avoid a repetition of the tax credit fiasco, for which prime minister Tony Blair apologised in the House of Commons last month. Testing on the tax credit system was curtailed only for problems to emerge after the system went live.

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