So you are starting to feel the feeling of dread as Payroll year-end fast approaches yet again. As an employer running payroll, you need to:
Report to HM Revenue and Customs (HMRC) on the previous tax year (which ends on 5 April) and give your employees a P60. Finally, you need to prepare for the new tax year, which starts on 6 April.
We have put together a quick Action Planning top tip guide, to help guide you on the path of PYE processing bliss (or as near as possible!)
1. First top-tip from Action Planning is keeping calm. Which is easier said than done, but overly stressing about a situation can cause more mistakes due to unnecessary excess pressure. A positive thought about PYE is the whole process has become more manageable since the introduction of RTI in April 2013. It can still be a daunting task, just not as daunting as previous years!
2. Make sure you have a “TO DO” list. This list should consist of key dates in which certain task have to be performed. Doing so will help keep you on track and focused on what needs to happen and when.
Here is the list from the HMRC Website showing a list of task and dates.
Send your final payroll report of the year – On or before your employees’ payday
Update employee payroll records – From 6 April
Update payroll software – From 6 April
Give your employees a P60 – By 31 May
Report employee expenses and benefits – By 6 July
If you require P60 forms, Sage Payroll Software updates or more information on P11D software (Automates P11D submissions to HMRC.) Contact us; we can arrange these for you.
3. Following the HMRC guide, the first task is to send your last Full Payment Submission (FPS) on or before your employees’ last payday of the tax year (which ends on 5 April). Work out in advance which payroll run this is and remember to put ‘Yes’ in the ‘Final submission for year’ field in your payroll software.
If you run more than one payroll under the same PAYE scheme reference (e.g., for employees you pay weekly and monthly), include the end-of-year information in your last report.
If your last payday falls on the 5th April, you have an additional period to process. Contact us if you require more help on this subject.
4. Never forget to update your Payroll Software and run any automatic updates. You must follow your provider’s instructions to update your payroll software so it uses the latest rates and thresholds for Income Tax, National Insurance, and student loan repayments. This will reduce errors and make payroll processing and submission less of a headache.
5. Next, you need to update your employee payroll records. This should be done for each employee working for you on 6 April. You need to:
– prepare a payroll record
– identify the correct tax code to use in the new tax year
– enter their tax code in your payroll software
You should include in your payroll:
– all employees you pay in the tax year
-any employee who has worked for you in the current tax year (since 6 April) even if they’ve already left
6. You must give employees a P60 to all employees on your payroll who are working for you on the last day of the tax year (5 April). The P60 summarises their total pay and deductions for the year. You must give your employees a P60 by 31 May.
7. Right, you are nearly done for this year however, you must not forget this last step (if it applies to you.) You must report expenses and benefits to HMRC by 6th July. You will have to do by submitting off a P11D form to the HMRC. There is an excellent module to Sage 50 Payroll (P11D Module) which produces HMRC-approved statutory P11D, P9D, P11Db and P46 forms and submit end of year expenses reports for each employee to HMRC online, straight from your software.
You would then pay any Class 1A National Insurance due on the taxable expenses and benefits you’ve provided. Your payment must be received by 22 July (or 19 July if you’re paying by post).
8. RELAX! That is Payroll Year End completed for this year. If this checklist, which is just a brief overview of PYE, sounds overwhelming, contact us straight away. We can help in so many ways, from sourcing you the right software to booking you in for a 1-2-1 remote session and training you up correctly on PYE.
To be directed to our shop, please select from the options below.
P60 FORM – CLICK HERE
Sage 50 Payroll – CLICK HERE
Upgrade – CLICK HERE
1-2-1 Remote Training – CLICK HERE
Please note P11D Software is available, we are just currently in the process of updating the details onto our online shop. Please do contact us for prices.
Here is a handy YouTube video from last year. Ignore the part where it mentions about the 4th April. This is because last year (2016) was a Leap Year. We will update this video to the 2017 version, once Sage makes it available.