So it’s that time of the year where your payroll is approaching Month 12 and you need to finalise the year end submission to HMRC.. The tax year for payroll typically runs from the 6th April until the 5th April the following year e.g. the tax year 2021/22 would run from 06/04/2021 - 05/04/2022.
Where to start? Read on for a simple step by step guide …
1. Finalise your payroll up until Month 12
This will be the same process that you use throughout the year whether you run your payroll monthly, weekly or other depending on your pay frequency. Taking a typical monthly payroll as our example, Month 12 is the final month of the tax year and should ideally run up until the 5th April for optimum tax efficiency. Process your payroll as normal for Month 12.
2. Send off your FPS (Full Payment Submission)
This will follow the same process that you use throughout the year.
3. Send off an EPS (Employer Payment Summary)
This feature can be found in all payroll providers software. This submission of an EPS will indicate to HMRC that the you have completed the full tax year’s payroll FPS’s and let them that you are closing your tax year. There should be an option to tick something such as ‘Final Submission - Include Final Submission indicator on EPS submission’ or similar again dependant on your software. An EPS should only be sent off once everything is accurately finalised and completed.
4. Issue P60’s to employees
You should then go ahead and download your employees P60’s. This gives an overview of their tax year which they will need for varying reasons including their own personal tax records.
Common questions
I have submitted my EPS and then have realised I have made a mistake on my pay runs?
You will need to send another FPS but a slight variation to this called an Additional Full Payment Submission.
What software can I use to do this?
Most payroll software packages will facilitate closing a tax year end. HMRC offers a free ‘Basic Tools’ application which you can download to most computers (https://www.gov.uk/basic-paye-tools).. At Busy Bee Business Solutions we work alongside BrightPay (https://www.brightpay.co.uk/).
Payroll can be a complicated subject and each businesses payroll varies so we understand if you may have more questions based on the basic step by step guide above. For any queries or general advice please get in touch with us directly through our contact page. Alternatively email emily@busybeebusinesssolutions.co.uk or call 07473 209992.
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