Small employers will not be penalised if they fail to file their P35 end of year returns for 2009/10 online.
All P35 forms must reach HMRC by 19 May 2010, otherwise late filing penalties will apply.
For details of which penalties to apply to those who employ more than 5 employees see Penalties for failing to file PAYE online .
For late filing penalties see Tax penalties: failure to make a return (late filing).
Penalties if there is an error on a PAYE return: penalties are charged according to a complex formula which depends entirely on the facts of each case, and weighing up the actual tax loss (if any) and taxpaper behaviour, see Tax compliance: errors in returns and documents.