Employers have been receiving over the last few days the Form P35 (Employers Annual Declaration Form) for the year ended April 5 .

This form has to be completed and submitted to Inland Revenue by May 19.

The other matter which we need to remember relating to the Form P35 is that the final remittance of tax and National Insurance due for the year ended April 5 in respect of our employees has to be paid to Inland Revenue by April 19. Any monies paid after that date will be subject to interest. Late submission gives rise to penalties.

A further issue for everyone to consider is the question of filing the documentation online. Those who voluntarily file online which are businesses with fewer than 50 employees, can receive up to £825 tax-free over the five years from 2004/05.

As well as filling out details of the employers and employees National Insurance and PAYE which have to be accounted for, there are a number of questions which each employer has to respond to and a declaration signed.

If any new employee has joined without bringing a Form P45, did you ask his or her to sign and complete a Form P46? If so, was this done on the basis that this is their only or main employment, entitling you to pay them up to £91 per week without making deductions? If not, should you be accounting for PAYE and possibly National Insurance?

Another problem area is the payment to individuals for doing work for a business but they are paid on the basis that they are self-employed. Inland Revenue are collecting huge sums from employers who have entered into arrangements to pay on this basis to someone who is assumed to be a subcontractor or consultant. If the arrangements between the parties resemble those between employer and employee, Inland Revenue are likely to be seeking to charge the employer for the tax and National Insurance which he should have accounted for.

In reviewing this type of arrangement, Inland Revenue will look at a number of aspects like: What is the basis of payment? Who decides upon the hours worked by the contractor? and Who controls the way in which the work is done?

Michael Taylor FCA ATII TEP Pearson May, Chartered Accountants

Trowbridge,Warminster, Chippenham and Bath.