The 2021/22 tax year ends on the 5th April 2022 so it is almost that time of year again to start thinking about processing your payroll year end, a task which some employers might find confusing and time consuming. With the right software and advice, it need not be either, so we have put together a simple eight step guide to assist you along the way. Of course, your Pegasus Partner is also on hand to help you and to ensure you meet your HMRC obligations.
STEP 1: Employee Details
Ensure all your employee details are correct in your payroll software.
STEP 2: Pay
Carefully check that you have paid your previous employees pay correctly and there are no errors.
STEP 3: Run last pay
Before the 5th April 2022 run your final pay run for the 2021/22 tax year and check you are happy with each employees year-to-date figures.
STEP 4: Process leavers and new starters
It is very important to process any leavers before you complete your payroll year end so the information falls into the correct tax year. Similarly, ensure any new starters during the 2021/22 tax year have been properly set up and processed correctly. It is likely you are well on top of leavers and starters but it is wise to double check these before you process your payroll year end.
STEP 5: Week 53
If you normally run a weekly, bi-weekly or four-weekly payroll OR you would be due to pay employees on 5th April 2022 then you will need too complete an additional pay run which is a called a ‘week 53’. Payroll software should automatically take care of this for you, or provide an extra pay field, but it is worth being aware of this and double checking you don’t need to make an extra payment.
STEP 6: Send Full Payment Submission
After completing the above five steps you can send your Full Payment Submission (FPS) to HMRC, the deadline for this is 19th April 2022. If you didn’t pay anyone in the last period before 5th April 2022 then you will need to submit an Employer Payment Summary (EPS).
STEP 7: P60’s
You have a legal obligation to provide every employee who was working with you on the 5th April 2022 a P60 by the 31st May 2022.
STEP 8: Check P9X
It is important to note that the payroll year end and start of the new tax year are two different processes and once you have completed your tax year, you need to set up for the year commencing 2022/23 before you start week one or month one. The P9X is a HMRC document which outlines new tax codes employers must change or carry forward on the 6th April – go through this carefully as there are often changes you must make and any you miss will cause complications when you complete your payroll year end next year.
At this stage it is also a good idea to check everything is in place for the new tax year commencing 6th April 2022 to 5th April 2023. Ensure all your employees have been rolled over correctly and put in place any pay increases you wish to.
There we have the eight steps for a simple and stress-free payroll year end. Completing your payroll year end need not be daunting and confusing when you have the right advice and software to guide you. For more information or advice about completing your payroll year end with Opera 3 Payroll please contact your Pegasus Partner.