For plenty of payroll teams, April creeps up faster than expected. The tax year closes, the deadlines stack up, and suddenly there’s a lot to do in a short window. But payroll year-end doesn’t have to feel like that when you have payroll best practices in place. With the right groundwork, what was once a last-minute scramble is now a manageable routine you’ll carry out year after year.
This guide walks you through everything involved in closing the 2026–27 tax year—what to check, what to submit, and how to make sure the new year starts on solid footing.
Step 1: Prepare
The most effective payroll year-end prep happens in February and March, not April. The more you can tidy up before the year closes, the less you’ll be firefighting once it does.
Reconcile your payroll records
Start by making sure your payroll software and HMRC are telling the same story. Pull your year-to-date figures for tax, National Insurance, and statutory payments, and check them against the Real Time Information (RTI) submissions you’ve made across the year. A mismatch is far easier to sort before the year closes than after.
Cross-reference your P32 (Employer Payment Record) with your HMRC account to confirm what’s been paid and flag anything that looks outstanding.
Review employee records
Before April arrives, work through your employee list with a critical eye. You’re looking for anything that could cause problems if it carries into the new year unchecked.
- Leavers: confirm all departures have been fully processed and P45s issued.
- Tax codes: scan for anyone still sitting on an emergency code, or a code that doesn’t look right. HMRC issues updated P9 notices before the new tax year begins, but it’s better to catch issues now rather than wait.
- Statutory leave: check that anyone on maternity, paternity, or shared parental leave has been handled correctly throughout the year, including any SMP or SPP reclaimed via the EPS.
- Student loans: make sure the right plan is recorded for each employee and that deductions have been applied consistently from the start.
- Directors: National Insurance for directors is calculated annually, so review the cumulative figures for each one before you close the year.
Round up all expenses and benefits
If you’re filing P11D forms for 2026/27, now is the time to gather everything you need. Go through your records and identify every employee or director who received a benefit in kind: company cars, private medical insurance, interest-free loans above £10,000, gym memberships, accommodation, and the like.
For each benefit, check whether it was payrolled during the year, in which case it won’t need a P11D, or handled outside payroll, in which case it will. Either way, you’ll still need to submit a P11D(b) to account for Class 1A National Insurance, even where benefits were payrolled.
One thing worth flagging:
2026/27 is the final tax year in which P11D forms are required for most benefits. From April 2027, all benefits in kind must go through payroll. If you haven’t yet set that up, now is the right time to speak to your software provider—don’t leave it until the deadline is looming.
Review pension contributions
Reconcile your pension contributions for the full year. Check that auto-enrolment triggered correctly for every eligible employee in every pay period, that the right rates were applied throughout, and that payments made it to the pension provider on time. If there are gaps, contact your provider before payroll year-end so you can agree how to put things right.
Review any outstanding HMRC notices or queries
Log into your PAYE Online account and look for anything that hasn’t been resolved; that includes late filing notices, outstanding queries, or anything HMRC has flagged. It’s much better to deal with these before the year closes than to carry them as unfinished business into 2027/28.
Get the latest insights and best practice guides, direct to your inbox.
Step 2: Submit
Once March payroll is done, you move into the closing sequence. Here’s your end-of-year payroll checklist—what needs to happen and when. Once March payroll has been processed, you move into the submission phase. Here’s your end-of-year payroll checklist—what needs to happen and when:
| Deadline | What's required |
|---|---|
| 5 April 2027 | Process your final payroll and submit your final FPS, marked as 'Final submission for year'. If you realise you've made an error after submitting, you can send an additional FPS but do it before 19 April. |
| 19 April 2027 | Submit your final EPS. This is your last chance to claim Employment Allowance, recover any statutory payments (SMP, SPP, SAP), or report any adjustments for 2026–27. Any statutory payment recoveries or Employment Allowance claims not included in the final EPS cannot be reclaimed for 2026–27. |
| 31 May 2027 | Issue P60 forms to all employees on payroll as of 5 April 2027 (paper or electronic). Don't forget employees on long-term leave; if they're still employed on 5 April, they must receive a P60, even if their pay was £0 for most of the year. |
| 6 July 2027 | Submit P11D forms for expenses and benefits in kind not processed through payroll. This is the last year P11D forms are required for most benefits. Mandatory payrolling of benefits takes effect from April 2027. Use this year-end to make sure you're set up for the change. |
| 19 July 2027 | Pay Class 1A National Insurance by cheque. |
| 22 July 2027 | Pay Class 1A National Insurance electronically. |
Step 3: Set up the new tax year
Closing the tax year is only half the job. Before the first April payroll runs, there are a few things to get right.
Apply new tax codes
HMRC issues new codes before the start of the tax year via P9 notices (bulk updates) and P6 notices (individual changes), both accessible through PAYE Online. Most payroll software will pick these up automatically, but confirm they’ve landed before your April payroll goes out. Any employee still on last year’s code will be taxed incorrectly from day one.
Update statutory rates and thresholds
Several figures change on 6 April each year. Before running your first payroll of 2027/28, check that your software reflects the latest numbers across all of the following:
- National Living Wage and National Minimum Wage
- National Insurance thresholds and category rates
- Statutory payment rates (SSP, SMP, SPP, SAP)
- Pension qualifying earnings thresholds
- Student loan repayment thresholds (by plan)
Most modern payroll systems update automatically, but it’s always worth checking rather than assuming—particularly if you’re on an older platform.
Prepare for mandatory payrolling of benefits
From 6 April 2027, payrolling benefits in kind becomes a requirement for most employers. If you’ve been using P11D forms until now, you’ll need to register with HMRC and configure your payroll software to include benefits in your FPS submissions from April 2027 onwards. Registration must be completed before the new tax year begins, so if you haven’t done it yet, act now via PAYE Online. Your software provider will be able to walk you through the setup.
Confirm year-to-date figures
Your payroll software should reset YTD figures automatically when you open the new tax year. Check that this has happened correctly before April payroll runs—if last year’s figures carry over, your tax and NI calculations will be wrong from the first pay run of the year.
Let your employees know what to expect
Send a brief note to your people explaining when they can expect their P60 and how to access it, particularly if you issue them electronically. Make sure u=your have a clear process in place for responding to any queries about P60 figures, as these tend to come in quickly.
It’s also worth giving employees advance notice of any changes they’ll see on their payslips from April 2027, particularly around payrolled benefits. Unexpected deductions generate a significant volume of avoidable queries.
Payroll year-end gets easier every time
A well-prepared year-end is largely a matter of timing—most of the work happens in the weeks before April, not during it. With the right software behind you and a clear sequence to follow, it’s one of the more straightforward points in the payroll calendar. If you’d like to see how Cintra supports teams through payroll year-end and beyond, book a demo.
Payroll Software
Find out more about Cintra's payroll software, built to handle whatever your workforce needs—no matter how complex. Packed with deep functionality, intuitive workflows, and expert support for in-house payroll teams.
