When payroll year end comes around you need to be prepared and organised to ensure everything is ready for it to be submitted to HMRC. To make things a little easier, we’ve put together a payroll year end checklist that you can refer to whenever you need.
Check when your payroll ends
The first place to start your payroll year end checklist is to confirm the end date, as there may be instances where you need to extend your payroll to week 53, 54 or 56. This applies if you do not process payroll on a monthly-pay basis, or if your processing deadline falls on April 5th in any year or on April 4th during a leap year (2024, 2028 etc).
For payroll that falls on April 5th you can use the below to determine when it should end:
- Weekly: Week 53 payroll (April 5th to April 11th)
- Two-weekly: Week 54 payroll (April 5th to April 18th)
- Four-weekly: Week 56 (April 5th to May 2nd)
This is something that your payroll software should automatically account for (including switching to a week one tax code for employees), but it is always a good idea to double check that the correct dates have been set to ensure no unnecessary mistakes are made.
Update leaver and starter information
Payroll year end is the period when you can update information about employees that have left and joined the business during the past 12 months.
Don’t just rely on what your systems tell you – speak with department managers to ensure nobody has been missed, as you don’t want to keep paying leavers or overlook payments that are due to newcomers.
This is a process that should be completed before your Full Payment Submission (FPS) or Employer Payment Summary (EPS) documentation is sent to HMRC. Adjustments can be made after this date, but it requires you to submit additional FPSs or EPSs which can add complications to the payroll workload. This must happen before the final submission deadline of April 19th.
Complete your year-end payroll
The next step in your payroll checklist is to process your year end. The processing date should be set to April 5th, so be sure to check that this is correct on your payroll software.
Once you process the year end and make your final submission you can move onto the P60s which must be received by employees no later than May 31st. P11Ds can also be included in the next step, although they have a later deadline of July 6th.
Prepare your P60 and P11D reports
Of the many forms you need to generate, P60s and P11Ds are two of the most important. We explain what needs to be done below:
A P60 will show the pay and deductions for an individual employee across a full year, summarising their payslips over the past 12 months. This document is automatically generated once the year end is complete. The employee is advised to keep it in a safe place for future use, as it will likely be needed as proof of income when taking out a loan or applying for a mortgage, for example.
Once the P60s have been produced, they should be collated and sent out in a timely fashion to all employees by May 31st. This should happen after they have received their final payslip for the tax year.
A P11D provides full details of any expenses or benefits that you have given to your employees over the past 12 months (although some benefits such as health insurance can be payrolled instead). It keeps HMRC up to date with the level of Class 1A National Insurance you need to pay on reported expenses and benefits.
Individual P11D forms are required for each eligible employee, and it must be received by HMRC by July 31st, while Class 1A payments must also be made for them.
A P11D(b) form also needs to be sent to confirm how much Class 1A NICs need to be paid.
Get ready for the new payroll year
A key part of any payroll year end procedure is to start preparing for the new tax year.
Once you have completed your year end and before starting month one (or week one) of payroll for the new year you should refer to HMRC’s P9X document. This will detail all the tax codes that needed to be changed or carried forward on April 6th.
You should also find this information automatically updated in your payroll software, which offers another way of cross referencing and checking that the information is up to date. However, you should always use HMRC as your primary source.
Other information that may need to be changed includes:
- Student loans and postgraduate loan thresholds
- CA2700 certificate renewals for anyone with deferred national insurance
- Basic Earnings Assessment (BEA) forms for employees receiving childcare vouchers
When you have all this information you can proceed and set employees up for their next year of payroll.
Important payroll year end dates to remember
Here is a summary of the key payroll year end dates you need to be aware of, making it easier to prepare so you can wrap up the procedure efficiently:
- April 5th
Tax year end
- April 6th
New tax year starts
- April 19th
HMRC deadline for any alterations made to the previous tax year
- April 22nd
Deadline for month 12 of PAYE
- May 31st
Latest date for employees to receive P60s
- July 6th
Final report deadline for expenses and benefits (including P11D and P11D(b) forms)
- July 22nd
Class 1A National Insurance payment deadline (April 19th for non-electronic payments)
Payroll year end procedure summary
Payroll year end can be extremely stressful, but with the right amount of planning it can be much easier to manage.
Using a payroll checklist alongside the right payroll software will ensure everything is in order so reports can be submitted on time and employees are correctly paid and subject to the right tax code.