Small and medium-sized businesses have been reminded by HMRC that there is no longer a PAYE paper filing option for companies with fewer than 50 employees.

Employers must register with HMRC to file online, while smaller businesses can use HMRC's free software to file their employee data securely online. The PAYE deadline is 19 May.

From May 2010, the tax office is also introducing new penalties for late payment of PAYE. This includes income tax, national insurance contributions, student loan deductions and construction industry scheme deductions.

"Major changes to PAYE filing and payment are only a matter of weeks away, so employers need to make sure they're well prepared for them. We will be writing to affected employers over the coming weeks," said Stephen Banyard, director of the business customer unit at HMRC.