When you operate a payroll (you have employees), you are required to file an annual return every year. It's done by filing a Form called P35 (even though it's now done electronically). The deadline is May 19th and if you fail to do it in time you will you incur steep penalties. The penalty is £100 per month late and per 50 employees. Moreover, HMRC tends to be very slow in issuing those penalty letters which means that when you receive the first letter, it will most probably be months later and the penalty will have already accrued in the hundreds of pounds.
