Employing people & RTI

Preparing for Payroll Year End and beyond ...

The introduction of RTI in April 2013 will bring important changes to the way employers submit PAYE information to HMRC, and effectively means the end of Payroll Year End as we know it. However, unless you're currently part of an RTI pilot scheme, there is still one more PAYE year end to go and existing rules and methods still apply.

Here are five key PAYE year end tasks you will need to complete before and after the tax year ends on 5 April.

Finalise your payroll records for the tax year

You'll need to finalise the figures (ie total earnings, tax, NICs, statutory payments, etc) on each employee's payroll record. If you've maintained a P11 form or similar record, the figures contained will help you complete your Employer Annual Return. Jonathan Dowden, Sage Payroll Product Manager, explains: "The calculations are done automatically if you use Sage payroll software. You can finalise your payroll records after the last payday before 5 April."

Complete and file your Employer Annual Return

The Employer Annual Return consists of a P14 form for each employee and a P35 form, which summarises year-end payroll totals for all your employees. "HMRC must receive your Employer Annual Return by 19 May," explains Jonathan. "You can be charged a penalty if you’re late," he warns. "Most employers must file online. To do this, you must first have registered to use HMRC’s PAYE online service. That can take up to a week, and you could incur penalties if you file late, so if you’re a new employer and need to register – don't leave it too late". Sage Payroll makes submitting these returns to HMRC simple in only a couple of clicks.

Find out whether you've over paid or underpaid

Your Employer Annual Return will detail how much PAYE tax and Class 1 NICs were due to HMRC for the tax year. "This might be more or less than the amount you actually paid," says Jonathan. "If you've overpaid by up to £500, HMRC will let you know and automatically deduct this amount from the next year's payments. If it's more than £500, you can claim it back. If you've underpaid, you’ll need to pay the balance to HMRC - and may be charged interest if you're late."

Give a P60 to your employees

"You must provide all employees who still work for you on 5 April 2013 with a P60, which summarises their pay and deductions for the year, of course," Jonathan explains. "You must give your employees their P60s by 31 May, either in paper form or electronic, if they prefer that format. Our payroll software automatically creates a P60 for each employee, which can be printed or emailed to them."

Complete and file expenses and benefits forms

If you've provided expenses and benefits during the tax year to any employees, you must complete and file either a P9D form or P11D form. You must also file a P11D (b) form to declare Class 1A NICs payable on these. All forms must reach HMRC by 6 July. Jonathan adds: "If you send a cheque by post to pay Class 1A NICs due on taxable employee expenses and benefits, it must reach your HMRC accounts office by 19 July. If you use an approved electronic payment method, the money must be cleared in HMRC's bank account by 22 July, if you want to avoid interest," he concludes.

Written in association with