Navigating the complexities of payroll management can often feel like a daunting task for employers, especially as the end of the payroll year approaches. Ensuring compliance with both employee needs and HM Revenue and Customs (HMRC) requirements is crucial, yet it can consume valuable time and resources that could be better spent growing your business.
As the payroll year draws to a close on 5th April, it's essential to prepare your payroll effectively to meet the upcoming deadlines. With our expert payroll team at Purple Accounts, you can simplify this process and ensure everything is in order well before the submission deadline of 19th April.
Here's our comprehensive ten-step guide to putting your payroll in order for the year-end:
Step 1 – Employee Details Review
Begin by meticulously reviewing and updating all employee details in your payroll software. Accuracy here is paramount to avoid any discrepancies later on.
Step 2 – Pay Review
Take the time to review pay details for each employee to ensure accuracy. Mistakes such as over-reporting bonuses or incorrect pay periods can easily slip through the cracks if not thoroughly checked.
Step 3 – Final Pay Run
Process the final pay run before 5th April and review year-to-date figures for each employee to ensure completeness.
Step 4 – Handling Leavers
Process any employee leavers before the final submission to ensure their information is correctly recorded for the tax year.
Step 5 – Addressing Week 53
For businesses with weekly payroll schedules, consider the implications of a Week 53 payment, particularly in leap years. Ensure your software accommodates this extra pay period and adjust tax codes if necessary.
Step 6 – Submission to HMRC
Once all data is verified, submit your final Full Payment Submission (FPS) to HMRC. This action locks down the figures for the tax year for each employee. Additionally, if no payments were made in the final period, submit an Employer Payment Summary (EPS).
Step 7 – Issuing P60s
Produce and distribute P60 forms to all employees by the legal deadline of 31st May. This document is essential for tax purposes and must be provided to all active employees at the end of the tax year.
Step 8 – Preparing for the New Year
Following the completion of the payroll year end, take the opportunity to plan for the year ahead. Ensure all current employees are correctly rolled over into the new tax year, and adjust tax codes accordingly based on HMRC's guidelines outlined in the P9X document.
Step 9 – Professional Payroll Management
Consider outsourcing your payroll and auto-enrolment responsibilities to a professional. Handling payroll internally can be time-consuming and prone to errors. A professional payroll service ensures accuracy, compliance, and peace of mind, allowing you to focus on core business activities.
Step 10 – Stay Informed and Updated
Stay informed of any changes to payroll legislation and HMRC requirements. Regularly review your payroll processes and seek advice from experts like Purple Accounts to ensure continued compliance and efficiency.
Key Payroll Dates to Remember:
5th April: Final day of the payroll year.
6th April: First day of the new payroll year. Ensure all new tax codes are implemented.
19th April: Deadline for submitting final reports to HMRC for the payroll year.
31st May: Deadline for providing employees with P60s.
6th July: Deadline for reporting expenses and benefits to HMRC.
22nd July: Deadline for paying Class 1A National Insurance Contributions (NIC).
Let Purple Accounts support you in managing your payroll effectively, allowing you to focus on what matters most – growing your business. Give us a call on 01925 979500 or email: enquiries@purpleaccounts.com