With payroll year end on the horizon, it’s time for business owners to get their accounts in order and ready to report to the tax gods at HMRC.
The end of the tax year brings with it reporting duties galore for small and large enterprises. For any business running payroll, year end reporting is a relatively straightforward process, but can be understandably daunting for younger businesses.
We’re breaking down the key dates you need to know ahead of payroll year end, along with a no-nonsense step-by-step guide to powering through your year end payroll to-do list.
Key payroll year end dates
First things first: wrapping your head around the key dates surrounding year end payroll.
Here’s a breakdown of your various year end payroll activities and deadlines for completion, along with some other important dates to be aware of:
- 2022/23 tax year ends: 5th April 2023
- Deadline for updating employee payroll records: 5th April 2023
- Deadline for updating your payroll software: 5th April 2023
- 2023/24 tax year begins: 6th April 2023
- Deadline for 2022/23 tax year submissions: 19th April 2023
- Deadline for month 12 PAYE: 22nd April 2023
- Deadline for delivery of P60s to your employees: 31st May 2023
- Deadline for reporting on employee expenses and benefits: 6th July 2023
- Deadline for submitting P11D and P11D(b) forms: 6th July 2023
- Deadline for payment of class 1A National Insurance contributions on Benefits in Kind (for those not using digital systems): 19th July 2023
- Deadline for payment of class 1A National Insurance contributions on Benefits in Kind (for those using digital systems): 22nd July 2023
Familiarising yourself with these important cut-off dates will help you account and report with confidence going into the new tax year, so get them in your work diary. And remember: many of these are final deadlines rather than suggested completion dates, so it’s always worth getting ahead of the game where you can to avoid taking any financial reporting down to the wire.
Year end payroll: step-by-step
- Find out when your business’s payroll ends. If you process payroll weekly, fortnightly or four-weekly, and your usual payroll date falls on 5th April in any year (or 4th April in a leap year), your payroll may not end in week 52 of the tax year. Weekly payrolls that fall on 5th April will have a week 53 payroll (5th to 11th April), while fortnightly payrolls that fall on 5th April will have a week 54 payroll (5th to 18th April) and four-weekly payrolls that fall on 5th April will have a week 56 payroll (5th April to 2nd May). In any of these scenarios, you should move your employees to a week one tax code for the additional payroll. This should be updated again to the new tax code once your new payroll year starts.
- Review your staff for new hires and leavers. It’s vital to ensure that any employees who have left the business or started at the business during the last tax year have been processed. Make sure to do this prior to submitting your final FPS (Full Payment Submission) or EPS (Employer Payment Summary).
- Complete your final pay run of the tax year. This needs to happen before you can process your year end. Once your last pay run for the year is complete, you should submit your FPS to HMRC (as well as your EPS, if applicable). Alongside this, you should also produce your P32 report.
- Complete your year end. At the end of the current tax year, make sure to submit your final EPS to HMRC, which will include any year end declarations. Process your year end and complete your final submission for the current tax year.
- Prepare your employees’ P60s. All members of staff working on the last day of the tax year (5th April) must receive a P60 by 31st May. The P60 breaks down employees’ pay and any deductions for this tax year and can be created through your payroll software and share directly with each employee in the same way as their payslips. This must be done after you’ve issued employees’ final payslips for the tax year.
- Start the new payroll year. The first order of business when ushering in the new tax year is to consult HMRC’s P9X - a document outlining relevant tax codes for the year ahead. There are a few other considerations to be made at this stage, including tax thresholds for student loans, deferred National Insurance and childcard voucher eligibility and amount.
Follow this payroll year end guide to the letter and you can enter the new tax year with confidence - and if you hit any stumbling blocks along the way, have HMRC’s comprehensive guide to payroll year end requirements at the ready.
For more support and guidance with your business’s year end payroll, look no further than Harlands Accountants. It’s our mission to help business owners make sense of their financial reporting and account with confidence. Get in touch today to speak to a member of our expert team.