PBT Accountancy Ltd are Payroll year end experts. Once Tax return season has finished, the 6th of April seems to come around very quickly so we have put together a helpful checklist to make sure that your are fully equipped to survive Payroll year end.
Item 1: Payroll report
The final payroll report can be a tense and nerve wracking and you strive to make sure that you have checked, double checked and even treble checked every detail before you send it off to the HMRC. So to prevent any heart palpitations when this deadline springs up on you, pop a reminder in your calendar at the end of March when an employee’s last day in the tax year usually lands and don’t forget to type ‘Yes’ in the ‘Final submission for year’ field in your payroll software.
Item 2: Payroll records
Employee payroll records will need to be updated every year at the start of the new tax year (from the 6th April). It is likely that you will have already received a helpful reminder from your payroll software to update your employee tax codes. At this point you with receive a P9T form or a P9X form. What is the difference we hear you ask?
In simple terms a P9X form is for any general changes for employees whose tax code ends with an ‘L’ and a P9T form is for any employees who need a new tax code. Once you receive the forms the instructions should be pretty self explanatory and easy to follow through to completion.
Item 3: Payroll software
Once you are at the stage where you have successfully completed all your employee records you will also need to update your payroll software. This update is to ensure that your software is using the very latest rates and thresholds for Income Tax, N.I and student loan repayments. Once again your payroll software should be super helpful and provide you with instructions on how and when to update so it is a simple case of following the instructions. Once updated your rates and thresholds will then be set for the remainder of the year.
Item 4: P60’s
The 31st of May is another deadline for your diaries. This is the deadline by which you are required to provide your employees with their P60’s. As well as being a useful piece of documentation for employees it will also be useful for you as it will summarise pay details for your employees, including total salary and deductions for the year.
Why are P60’s required? They provide evidence of tax paid on a salary and this can help with claiming back overpaid tax, applying for tax credits and providing proof of income for a loan or a mortgage application.
Item 5: Employee expenses and benefits report
At PBT we like to ensure our processes and procedure are efficient and prolific. As such we advise you to add sending your employee expenses and benefits report to the HMRC to your year end procedure. Although this report is not technically required until the 6th of July we find that it ties in nicely with all the other procedures that you will be conducting at year end. is not required at year end.
The employee expenses and benefits report requires form P11d. If you are lucky your software may have the ability to send a report of this to the HMRC.
So what is included in employee expenses and benefits? It can cover a wide range of things from company cars through to childcare and travel expenses to health insurance. Make sure you detail everything as it is very important to ensure you report on all forms of benefits and expenses received by your employees.
Once you have reviewed all these benefits and expenses you must complete the P11d(b) form. You will then be required to pay Class 1A National Insurance that is due on the taxable expenses and benefits that your employees have received. Payment must reach HMRC before 22nd of July, so yes, another date for the diary!
There we have it, your fool proof checklist for payroll year end. If you need any help or assistance with any of the above, get in touch with the PBT team who would be happy to help!