Payroll Year End is fast approaching. The perfect storm of reporting and admin can be a panic inducing time, especially with huge amounts of HMRC compliance involved.
That’s why It’s important to get it right, avoid costly mistakes, and make sure that you remain organised.
And of course, once the final report has been submitted, it’s time to get the wheels in motion for the new payroll year, so there’s truly no rest as payroll year end approaches!
Your key payroll year end dates to remember
Before you begin, there are a couple of all-important dates that you need to be aware of. These are:
- 5th April, end of tax year 2022/23
- 6th April, beginning of tax year 2023/24
- 19th April, submit final FPS & EPS for 22/23
- 31st May, employees to receive P60 for 22/23
- 6th July, P11Ds for 22/23
Payroll Year-End Checklist
Keeping those important dates in mind, let’s take a look at the steps you’ll need to take to make sure you don’t get caught out.
1. Find out when your payroll ends
This is where it can get a bit complicated. The date your payroll ends may not always be straightforward. In some instances, a company’s payroll may not end on Week 52, meaning that you may need to complete an additional payroll.
Some employers may choose to pay their employees on a different schedule, such as every 4 weeks or bi-weekly, which could result in payroll ending outside of week 52.
Additionally, employers may have a tax year that doesn’t align with the standard calendar year. In which case the payroll year would not end on the same date as the calendar year and may fall outside of week 52.
Employers may also pay bonuses or other forms of additional compensation to their employees, which could result in payroll not ending on week 52 as it would require additional calculations and submissions to HMRC.
Employers may also experience errors or delays in submitting their payroll information to HMRC, which could push the end of the payroll year beyond week 52.
Are you still with us?
We told you it was complicated.
This is where having the correct software in place can really pay dividends in keeping everything tracked and on time.
2. Check your employee records are up to date
Another consideration is your employee records. As you know, this is one element of your payroll responsibilities where it can be so easy to make mistakes. As the year-end approaches, it’s important to double-check that all employee information has been processed correctly.
In practice, this means making sure that employees who have left your organisation have been removed from your records and any new starters have been added. It sounds simple enough but I’m sure you won’t be surprised if we tell you that this is a major stumbling block for lots of HR and payroll teams out there.
Make sure everyone in your organisation is talking to one another and providing the necessary employee information when required. The bigger your organisation, the more difficult this can be so this is definitely an area where you need to be on your game.
3. Submit the final FPS of the year
Once you’ve worked out whether you have any additional weeks, have processed the final payroll of the tax year and have ensured your employee records are up to date, it’s time to send your final Full Payment Submission (FPS). You may also be required to send your final (Employer Payment Summary) EPS.
Remember to pay close attention to your FPS and EPS submissions as any errors can mean that retrospective adjustments are required. These can be frustrating as well as time-consuming so to avoid shredding your nerves even further, it pays to have an eagle-eye on this.
Once that’s taken care of you’ll be able to proceed with the payroll year-end process.
4. Process your year-end and make your final submission
You’re now in a position to process your year-end and make your final submission for the 2022/23 tax year.
You’re nearly home and dry. Once this has been completed, you will then be able to produce your P60s.
5. Produce your P60s
P60s are an all-important part of the payroll process. Any employee who is working for your organisation at the end of the tax year will need to receive a P60 that details their pay and deductions.
Remember, you will also need to include anyone who works for you as a deemed employee in line with IR35 legislation. We know this is another layer of complexity you could do without but unfortunately, those are the rules.
However, to make this task easier, your payroll software can generate P60s that can be easily shared with your employees digitally. This will need to be supplied to your employees by the 31st of May.
6. Start the payroll year
Okay, now you can take a breath.
With everything submitted it’s now time to begin the new payroll year. We know you can hardly contain your excitement.
Before you burst off the starting blocks you will need to refer to the HMRC’s P9X document to find out if any amendments have been made to the tax codes this year.
Don’t panic if they have. Your payroll software should be HMRC compliant and should ensure that any changes are taken into account, so you’ll have all the tools you need to update allowances and prepare your system for the new tax year.
Payroll Legislation Guide
The facts, figures, thresholds and allowances for 2023-24 spanning tax, National Insurance, pensions, statutory payments and more.
More things to remember
Keeping in mind some basic rules when it comes to managing your payroll can make life so much easier. You also need to be aware of how to handle complexities, such as payment in kind, that can add extra work to the process.
While there’s a lot you can do to avoid mistakes, payroll is undoubtedly a time-consuming and often confusing process. Because of this and the impact it can have, particularly on smaller organisations, savvy employers will opt to outsource their payroll. This means that you can still stay in control but remove many of the headaches that the process can create.
Whatever way you manage your payroll, there are some key payroll responsibilities that employers need to remember:
- Employers must submit a Full Payment Submission (FPS) every time they pay their employees, usually on or before the date that they pay them.
- Employers must submit an Employer Payment Summary (EPS) at least once a month, even if there are no payments or deductions to report for that month.
Getting it right
By now you will have realised how arduous payroll can be.
But don’t fret. The right payroll software can make it significantly easier to manage your complex payroll responsibilities.
Cintra’s fully integrated payroll and HR software gives you a powerful set of tools to efficiently manage your payroll. As it’s completely cloud-based it can be securely accessed from wherever you need it, by anyone you wish.
We’re also good listeners so we continually take onboard customer feedback and provide expert support as and when you need it.
Better still, outsourcing your payroll can take care of your entire payroll process, while you focus on other areas of your organisation. It takes the hassle and worry out of payroll, freeing up time and resources that can be better spent elsewhere.
Doesn’t that sound wonderful?
If you’d like to find out more about our bespoke payroll services, why not book a demo?
It’s got to be worth a look.