Smaller firms are being advised to file their P45 and P46 starter and leaver forms online.

The Institute of Chartered Accountants in England and Wales (ICAEW) said that doing so would help small firms prepare for the time that online filing for in-year PAYE forms becomes compulsory.

At the moment, firms with 50 or more employees must file their PAYE forms electronically or face a penalty charge.

But as from 6 April 2011, online filing becomes mandatory for employers with fewer than 50 workers.