Payroll year end

At the end of each tax year you must submit your end of year declarations to HMRC and provide a P60 to all employees still working with you. You can do this quickly and easily in Sage One Payroll in just a few simple steps.

Key dates over year end

  • 5 April: Tax year ends.
  • 6 April: New tax year starts.
  • 19 April: Deadline for final submissions of 2014/2015 tax year, including your end of year declarations.
  • 20 April: From this date, you can submit an earlier year update (EYU) to HMRC to notify them of corrections to the 2014/2015 tax year.
  • 31 May: Employees still employed with you on 5 April 2015 must have their P60s by this date.

If you want to, you can start processing in the new tax year before you run your year end. However, you must complete the tasks in Part 1 and those in Part 2, before the relevant HMRC deadlines.

Part 1: Prepare for year end

Government Gateway Credentials

You need to check you’ve registered with the Government Gateway and that your account is active before you can make online submissions and your complete year end.

Check if you have an extra pay run

If you process weekly, two weekly or four weekly payroll and your normal pay date falls on Sunday 5 April 2015, you’ll have an extra pay run. If you have an extra pay run, this is your final pay run of the year and you should process is as normal.

Processing leavers

Before you process your final pay run, you need to enter the last working day for any employees who have left your employment during this period.

Process your final pay run

Before you can run your year end, you should complete your final pay run in the 2014/2015 tax year. If you process more than one pay cycle, for example, weekly and monthly, make sure that you update the last pay run of the tax year for each pay cycle.

You must submit your full payment submission (FPS) for the last pay run. You must also record your P32 payment to HMRC, and if necessary submit an employer payment summary (EPS) as normal.
 
If you have any outstanding or failed RTI submissions for the 2014/2015 tax year, these show in the HMRC section on the Summary tab.

Part 2: Run the year end

Review your employees’ pay values

Before you submit your final EPS submission you must review your employees’ pay to make sure their values and the information you submit to HMRC is correct.

Submit the final EPS

Now that you’ve checked your values are correct, you need to submit the final EPS of the tax year. This includes answering some declaration questions and confirming your final liabilities.

Produce your employees’ P60s

You must provide a P60 to every employee who is working for you on 5 April 2015. With Sage One Payroll, you don’t need any P60 stationery. You can simply create a PDF which you can then send to your employees.

Part 3: Starting the new tax year

Update NI categories for employees’ under the age of 21

From 6 April 2015 every employer with employees under the age of 21 will no longer be required to pay Class 1 secondary NI contributions (NICs) on earnings up to the upper earning limit (UEL), for those employees.
 
If you have any employees under the age 21, those on category A change to M and those on J change to Z. You should update the employee record before processing the first pay run of the new tax year.

A warning message appears when you process your pay run for any employees whose NI category is not correct for their age.

For further information you should visit, https://www.gov.uk/rates-and-thresholds-for-employers-2015-to-2016.

Update your employee tax codes

When you process the first pay run of the new tax year, Sage One Payroll prompts you to update your employees’ tax codes.

Claiming NI employment allowance

Most businesses can claim employment allowance which enables you to reduce your employer Class 1 national insurance (NI) contributions by up to £2,000 per year. You can claim the allowance when you record your payment to HMRC and submit an EPS in the new tax year.

Claiming small employers’ relief

If you’re classed as a small employer, you can claim small employers’ relief. You reclaim the relief when you record your payment to HMRC and submit an EPS in the new tax year.

Your EPS submission is monthly or quarterly, depending on your HMRC reporting frequency.

Earlier year update (EYU)

If you need to make corrections to the 2014/2015 payroll after you’ve submitted the FPS for the 2014/2015 tax year, you must report these corrections to HMRC using the earlier year update (EYU) online submission.
 
You have up until 19 April to submit your final FPS. If you submit your final FPS, then notice a mistake after this, you must correct your payroll then submit an EYU. From 20 April 2015, HMRC accepts EYU submissions for corrections to 2014/2015 payroll.

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