Annual PAYE Reporting and End-of-Year Tasks

Introduction

Every tax year end involves important payroll tasks to ensure you comply with HMRC rules. You must report the previous year's payroll information, provide employees with P60 forms, report any expenses and benefits, and prepare your payroll records for the new tax year starting on 6 April. Missing these deadlines can result in penalties.

Key deadlines at year end

Your final payroll report must be sent on or before your employees' last payday before 5 April (the end of the tax year). You must give all employees working for you on 5 April their P60 forms by 31 May. If you provide expenses or benefits to employees, you need to report these to HMRC by 6 July, and pay any Class 1A National Insurance due by 22 July (or 19 July if paying by post).

Send your final payroll report

Your final Full Payment Submission (FPS) must be sent on or before your employees' last payday of the tax year. If your payroll software has a 'Final submission for year' field, mark this as 'Yes'. If you run multiple payrolls under the same PAYE scheme reference (for example, weekly and monthly paid staff), include the end-of-year information in your last report.

When to use an Employer Payment Summary instead

You should send your final report using an Employer Payment Summary (EPS) rather than an FPS if you:

• Forgot to mark 'Yes' in the 'Final submission for year' field in your last FPS
• Use software that doesn't have a 'Final submission for year' field
• Did not pay anyone in the final pay period of the tax year
• Sent your final FPS early and did not pay anyone for one or more full tax months in the last tax year

Week 53 payments

If you pay employees weekly, fortnightly or every four weeks, you may need to make a 'week 53' payment in your final FPS. Your payroll software will calculate this for you. In the 'Tax week number' field, enter '53' for weekly paid employees, '54' for fortnightly paid staff, or '56' for those paid every four weeks. HMRC will send a P800 form to any employees who owe tax following a week 53 payment.

Correcting mistakes in your final report

If you spot an error in your final FPS before 19 April, send an additional FPS with corrected year-to-date figures and enter '0' in the 'Pay in this period' field. After 19 April, send an FPS showing the correct year-to-date amounts. If you've recorded the wrong payment date and it's still before 5 April, send an additional FPS with the correct payment date, putting '0' in 'Pay in this period' and giving the year-to-date figures.

Provide P60 forms to employees

You must give a P60 to all employees on your payroll who are working for you on the last day of the tax year (5 April). The P60 summarises their total pay and deductions for the year. This must be provided by 31 May. Most employers produce P60s using their payroll software. If your software cannot do this, you can use HMRC's Basic PAYE Tools. If you're exempt from filing your payroll online, you can order paper P60 forms from HMRC.

If you need to change a P60 after issuing it, give your employee either a new P60 marked 'replacement' (this can be paper or electronic) or a letter confirming the change.

Update records and prepare for the new tax year

From 6 April, you need to prepare payroll records for each employee working for you. Your payroll should include all employees you pay in the tax year, regardless of amount, and any employee who has worked for you since 6 April, even if they've already left.

Tax codes for the new tax year

HMRC will send you a P9T form for any employees who need a new tax code, and a P9X form with general changes for employees whose tax code ends with 'L', 'M' or 'N'. If you receive many tax code notices, you may find it faster to use HMRC's PAYE Desktop Viewer. For new employees, use the information they provide (usually their P45) to work out their tax code.

Update your payroll software

Follow your provider's instructions to update your software so it uses the latest rates and thresholds for Income Tax, National Insurance and student loan repayments from 6 April (or earlier if your provider requests). If you use Basic PAYE Tools, you must download and install it again if you're using a version before 14.2.14330.88. Later versions check for updates automatically when the tax year changes or new rules come in.

Report expenses and benefits

At the end of each tax year, you need to provide details of non-exempt payments, benefits and facilities given to each employee. If you're registered to payroll benefits through Real Time Information (RTI), the taxable amounts will be reported in a Full Payment Submission. Otherwise, you'll use form P11D.

You must submit individual P11D forms for employees who have received expenses and benefits, along with form P11D(b) (Return of Class 1A National Insurance contributions), to HMRC by 6 July. You don't need to complete separate P11D forms for employees within scope who haven't received any expenses or benefits. If another person provides benefits for your employees, they must also submit information for the individuals who received benefits.

You must also give each employee for whom a P11D is due a statement of the information shown on their form by 6 July. If you've registered to payroll benefits, make sure that payslips or a statement sets out the amounts which have been taxed through PAYE deductions.

P11D forms must be completed and sent online. You cannot print and post this form. Some payroll software can report expenses and benefits directly, which may be more convenient.

Paying Class 1A National Insurance

After reporting expenses and benefits, you must pay any Class 1A National Insurance due on the taxable expenses and benefits you've provided. HMRC must receive your payment by 22 July, or 19 July if you're paying by post.

Sources

• Getting P45, P60 and other forms: employer guide
• End of year procedures to be followed by employer and employee (480: Chapter 24)
• Payroll: annual reporting and tasks

This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.