Payroll: annual reporting and tasks

Overview

As an employer running payroll, you need to:

• report to HM Revenue and Customs (HMRC) on the previous tax year (which ends on 5 April) and give your employees a P60
• prepare for the new tax year, which starts on 6 April

Send your final payroll report

Send your final Full Payment Submission (FPS) on or before your employees’ last payday of the tax year (which ends on 5 April).

Put ‘Yes’ in the ‘Final submission for year’ field in your payroll software.

You may be asked some end-of-year questions. If you’re sending your FPS after 6 March 2015, you won’t have to answer these unless your payroll software tells you to.

If you run more than one payroll under the same PAYE scheme reference (eg for employees you pay weekly and monthly), include the end-of-year information in your last report.

When to send an Employer Payment Summary (EPS)

You should send your final report in an EPS instead of an FPS if any of the following apply:

• you forgot to put ‘Yes’ in the ‘Final submission for year’ field in your last FPS
• you didn’t pay anyone in the final pay period of the tax year
• you sent your final FPS early and you didn’t pay anyone for one or more full tax months in the last tax year

If you’re late sending your final report

Send an FPS if it’s 19 April or before.

Otherwise send an Earlier Year Update (EYU). Give the difference between your last report and the final figures for the tax year. Don’t give the year-to-date figures.

If your payroll software can’t send an EYU, you can use HMRC’s Basic PAYE Tools.

You’ll usually be charged a penalty.

‘Week 53’ payments

If you pay your employees weekly, fortnightly or every 4 weeks, you might need to make a ‘week 53’ payment in your final FPS of the year.

Your payroll software will work out ‘week 53’ payments for you.

In the ‘Tax week number’ field of your FPS, put:

• ‘53’ if you pay your employees weekly
• ‘54’ if you pay them fortnightly
• ‘56’ if you pay them every 4 weeks

If you make a mistake

If you find a mistake in your final FPS of the year, what you need to do depends on the type of mistake and when you find it.

Update employee payroll records

For each employee working for you on 6 April, you’ll need to:

• prepare a payroll record
• identify the correct tax code to use in the new tax year
• enter their tax code in your payroll software

You should include in your payroll:

• all employees you pay in the tax year, no matter how much you pay them
• any employee who has worked for you in the current tax year (since 6 April) even if they’ve already left

Using the right tax code

HM Revenue and Customs (HMRC) will send you a:

• P9T form for any employees who need a new tax code
• P9X form with general changes for employees whose tax code ends with an ‘L’

If you get a lot of tax code notices, it may be faster to use HMRC’s PAYE Desktop Viewer.

New employees

Use the information new employees give you (usually their P45) to work out their tax code.

Update payroll software

Follow your provider’s instructions to update your payroll software so it uses the latest rates and thresholds for Income Tax, National Insurance and student loan repayments.

Basic PAYE Tools

You must download and install Basic PAYE Tools again if you’re using a version before 14.2.14330.88. The version number displays in the bottom-left corner of the tool.

Give employees a P60

Give a P60 to all employees on your payroll who are working for you on the last day of the tax year (5 April). The P60 summarises their total pay and deductions for the year.

If payroll software doesn’t automatically produce P60s you can order copies from HM Revenue and Customs (HMRC).

Report expenses and benefits

You can report expenses and benefits using your payroll software, if it has this feature.

Paying HMRC

Pay any Class 1A National Insurance due on the taxable expenses and benefits you’ve provided. Your payment must be received by 22 July (or 19 July if you’re paying by post).