Government Offices
Buck's Road, Douglas
Isle of Man IM1 3TX
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I want to know about the submission of employer’s annual returns

Each employer is required to submit a T37 “Employer’s Annual Return” within 30 days of the end of the tax year to which the return relates or within 30 days from ceasing to be an employer, whichever is the earlier.

The return should be completed fully and accurately. It should also be accompanied by a complete and accurate T14 “Isle of Man ITIP and National Insurance Deduction Card” for each employee employed during the tax year. A T14 must be completed for an employee even if no ITIP or National Insurance was deducted from payments of remuneration made to them during the tax year.

In addition, where benefits in kind are provided to employees, a complete and accurate T9 “Return of Expenses Payments and Benefits” must be completed for each employee employed during the tax year who received benefits in kind.

The employer’s annual return summarises the following:

the number of T14s enclosed with the return;
the total amount of ITIP deducted from employees during the year;
the total amount of National Insurance paid during the year;
the total payments made to employees during the year;
the number of employees in receipt of benefits for whom T9s are required.

Failure to complete the return fully and accurately may result in it being deemed to be unacceptable and returned to the employer to be fully completed. The Income Tax Division will treat such returns in the same manner as other outstanding employer returns.

Practice Note P.N. 169/11 contains examples of returns which will not be considered as complete, as follows;

Unsigned annual return - if an annual return has not been signed, it will be returned to the employer for signature. Where the original unsigned return was received by the due date, no penalty will be charged, if the form was otherwise complete and accurate.
No annual return received - if the required forms T14 and, where appropriate, T9, are received without the annual return (for example, via email or on disc), the employer will be contacted and, if the return is not submitted by the due date, penalties will be charged.
Annual return received but not all required forms T14 and T9 received - if an annual return is received by the due date but some of the required documentation is missing, the employer will be asked to provide the missing items. If the documentation requested is not received by the due date, late return penalties will be charged.
Annual return not fully completed - if the annual return is not fully completed, it will be returned to the employer for amendment. If the completed return is not received by the due date, penalties will be charged.
Forms T14 not fully completed - if the forms T14 are not fully completed, the employer will be contacted and asked for the missing information. If the information is not received by the due date, penalties will be charged.
Forms T9 not fully completed - if any forms T9 are not fully completed, the employer will be contacted and asked for the missing information. If the information is not received by the due date, penalties will be charged.

In each of examples 2 - 6 above, if the employer does not provide the required documentation by the due date, a penalty of £250 will be charged. Further penalties of £50 per day will be charged, commencing from the day after that on which the £250 penalty is charged, until everything required has been submitted. The level of penalty charged is not linked to how many documents remain outstanding

Information omitted from a return

If an employer completes a return to the best of their knowledge which is accepted by the Assessor but an omission is subsequently identified (e.g. an officer discovers that a taxable benefit-in-kind should have been on the return), no penalty will be charged if the relevant forms are submitted, and any payment due is made, within 30 days of the employer being notified of the omission.

If the return is still outstanding six months after the due date, the case will be referred for prosecution action to be taken in respect of the outstanding return and the employer will be liable, on summary conviction, to custody of up to six months or to a fine not exceeding £5,000, or to both.

If an employer ceases during a tax year, they should contact the Division in order for a part year return to be issued for the period from the start of the tax year (6 April) to the date of cessation. The employer is required to submit this return within 30 days of cessation. If a full and accurate return has not been received by the due date, the same penalties and action will be taken as for a late annual return.

Employers should note that, by enrolling for Online Tax Services for Employers, they can complete and submit their annual return and associated T14s and T9s online. For more information, please see "Online Tax Services for Employers".

Form T14 is a certificate of earnings in respect of each employee which includes details of gross remuneration, ITIP deductions, National Insurance deductions, etc. The forms can be downloaded from the Forms page or obtained from the Division at any time during the tax year.

If the totals on the T37 and T35 do not agree, then the employer should first check through their records to see if they can find the error. If the error cannot be found, they should send the T37 to the Division with as many details of the discrepancy as possible. Further advice can be obtained by contacting the Division.