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 2015/2016 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 2015/2016 tax year.
  • 31 May: Employees still employed with you on 5 April 2016 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 Monday 4 or Tuesday 5 April 2016, 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 this as normal.

Process any 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 2015/2016 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 2015/2016 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.

Watch how

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.

Watch how

Produce your employees’ P60s

You must provide a P60 to every employee who is working for you on 5 April 2016. 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.

Watch how

Part 3: Starting the new tax year

Sage One Payroll contains all of the 2016/2017 legislation changes.

Update your employee tax codes

From 6 April 2016, all L suffix tax codes increase by 40. The M and N suffix tax codes also increase by 44 and 36 respectively.

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

Claiming NI employment allowance

In the 2016/2017 tax year, the amount of employer Class 1 national insurance (NI) contributions you can reclaim is increasing to £3000.

If you’re eligible for employment allowance, you can claim it when you record your payment to HMRC and submit an EPS in the new tax year.

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Claiming small employers’ relief

If you’re classed as a small employer, you can claim small employers’ 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.

If you have any employees who live in Scotland, change their tax code

From 6 April 2016, any employees who live in Scotland will receive a new tax code and pay the Scottish rate of income tax (SRIT).

Sage One Payroll for the 2016/2017 tax year contains all of the correct legislation for SRIT, therefore all you need to do is to apply any tax code changes you receive from HMRC.

If you have any apprentices under the age of 25, change their NI category

From 6 April, you no longer have to pay employer’s NI contributions for apprentices under the age of 25, on earnings up to a new Apprentice Upper Secondary Threshold (AUST).

To accommodate this, you should use the new NI category, H, for apprentices under the age of 25.

If you have any employees under 25 who you employ as an apprentice, you must update their NI category before you process their pay in 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.

Earlier year update (EYU)

If you need to make corrections to the 2015/2016 payroll after you’ve submitted the FPS for the 2015/2016 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 2016, HMRC accepts EYU submissions for corrections to 2015/2016 payroll.

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