Key steps and dates for processing your payroll year end

Placeholder Image

Send your final FPS and/or EPS by 5th April 2017

You should send your final Full Payment Submission (FPS) on or before your employees last payday before the tax year ends on 5th April. If you don’t send your FPS by 5th April 2017 it’ll be classed as a late submission but HMRC will actually accept them until 19th April 2017. After this date they’ll no longer be accepted and you will need to send an Earlier Year Update submission (EYU) instead which highlights the difference between your last submitted report and the final figures for the 2016/17 tax year.If you need to send an Employer Payment Summary (EPS) then you should send this by the 19th April 2017. If you make submissions after this date you may be charged a penalty of £100 per 50 employees for each month your report is late.

Update employee records to transfer payroll into new tax year – as soon as possible

A large, but essential, task is updating the payroll records for every employee working for you on or before 6 April 2017 (throughout the tax year), regardless of how much you pay them or whether they have now left the business. You’ll need to prepare a payroll record, identify the correct tax code to use for them in the new tax year and enter it into your payroll software. The tax code increases are as follows for the 2017/18 tax year commencing 6th April 2017:

  • Employees with L based tax code – increase by 50 points
  • Emergency tax code will be 1150L wk/mnth 1
  • Employees with an M suffice tax code – increase by 55 points
  • Employees with an N suffice tax code – increase by 45 points

HMRC may send you tax code notices for individual employees. If this happens then you should overrule the standard increase values.

  • P9T form – HMRC will send you a P9T form highlighting any employees that need a new tax code.
  • P9X form – this will contain general changes for any employees whose tax code ends in an L.

For new employees, use the information provided on their P60 from their previous employer.

For employees who pay Scottish rate of Income Tax, make sure they are set as being a Scottish taxpayer.

Update your payroll software – as soon as possible

It’s important to update your software so you’re using the new rates and thresholds for the new tax year on 6 April 2017.For Opera 3 the updated software also includes a new advanced payments and deductions list that can assist with gender pay gap reporting.. If you’re using a Pegasus payroll solution it’s easy, and your fully trained Pegasus partner can guide you on this.

Give your employees a P60 by 31st May 2017

A P60 outlines everything you have paid your employees throughout the tax year, along with any deductions, and should be given to every employee by 31st May 2017.

Report expenses and benefits by 6th July 2017

If you’ve paid employees any expenses through your payroll then you’ll need to tell HMRC about these via a P11D submission. The P11D will show HMRC how much Class 1A National Insurance you owe – which must be paid by 22nd July 2017. Take a look at the Pegasus P11D Organiser for help with this.

For further advice on running your payroll year end take a look at the guidance information on the HMRC website or speak to your fully trained Pegasus Partner.

Posted On: February 24, 2017