Last Chance For Contractors To File End Of Year Tax Returns.

Contractors have less than one week left to file their 'P35' end of year tax returns or face penalty fines warns giant, the contractor specialist.

The P35 form, which lists PAYE and National Insurance deductions for employees, must reach the Inland Revenue by May 19th or contractors will face automatic penalty fines of 100 per month.*

According to giant, many contractors have delayed filing their P35 in the hope that the High court Stutchbury** judgement would provide guidance on their IR35 status. The forms require contractors to declare whether or not they fall under IR35 legislation.

However, Matthew Brown, Managing Director of giant group plc, warns that delaying the filing of returns past the deadline could attract the Inland Revenue's attention irrespective of the IR35 declaration.

The Inland Revenue admitted for the first time this year that the late filing of self-assessment forms could attract a tax enquiry, says Matthew Brown. With the number of payroll investigations on the rise, the Revenue could also take this stance with PAYE returns.

If contractors remain unsure of their IR35 status, they should seek professional advice and then get their P35 to the Inland Revenue as soon as possible.

* 100 per 50 employees or part thereof, per month or part thereof, from 20 May to filing date. Minimum penalty is 100. Maximum penalty is 100 or Tax and National Insurance declared on the P35, whichever is the greater. There is no penalty if the Tax and National Insurance equal nil.

** Gordon Stutchbury had challenged a Tax Commissioners' decision that, while he was acknowledged to be in business on his own account, he was forced under IR35 to pay tax as a disguised employee of one of his business's clients. The High Court dismissed his appeal.