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11811: PAYE End of Year Procedures - Overview

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Article ID 11811
Article Name PAYE End of Year Procedures - Overview
Created Date 05 Mar 2019 00:00:00
Product IRIS PAYE-Master, IRIS Payroll Business, IRIS Bureau Payroll, IRIS GP Payroll, IRIS Payroll Professional, Earnie, Earnie IQ
Codes: GGLEARNIE GGLENIEIQ GGLBURPAY GGLGPPAYROLL GGLPAYEMST GGLPAYBUS GGLPAYPRO
Problem

Completing your PAYE tax year end with RTI submissions.


For a summary of some key PAYE changes for 2019/2020 tax year, click here

Resolution

Since the introduction of RTI in April 2013 the Year End process is now very much streamlined and much easier than before.  The submission of a P14/P35 is no longer required however under RTI there are some subtle differences to be aware of. 


The main one is to ensure you submit your final FPS and/or EPS before 19th April.  The instructions on this page are designed to walk you through this process. 


Overview of the process - for detailed steps refer to the product specific guides below.


1. Send your final FPS and/or EPS.


2. Update your payroll software to the latest version - Click here for updates.
(Tax Year 19/20 software updates are now available)


3. Transfer your payroll into the new tax year


4. Apply standard points uplift to tax codes (your payroll software may do this automatically)


5. Continue with your payroll as usual.


6. Issue P60s to your employees before 31st May (excluding leavers)


7. Submit P11Ds (if required) by 6th July (this can't be done through your payroll software)



For product specific end of year guides follow these links


These guides cover the year-end process in more detail than is covered here and are printable for easy reference. 


PAYE-Master (Tax Year 19/20 Version)
Payroll Business (Tax Year 19/20 Version)
Bureau Payroll (Tax Year 19/20 Version)
GP Payroll (Tax Year 19/20 Version)
Payroll Professional (Tax Year 19/20 Version)
Earnie (Tax Year 19/20 Version)
Earnie IQ (Tax Year 19/20 Version)



Week 53, 54 or 56 payments:


If you are running weekly, 2-weekly or 4 weekly payrolls and your normal pay date falls on the 5th April you will have an additional period to process for 2018/19 tax year. Your final pay period of  2018/19 tax year will be week 53 (single weekly), week 54 (two weekly payroll) or week 56 (four weekly payroll).  The final submission deadline rules still apply as described below.


For more information on processing Week 53,54 or 56 please click here.



Sending your final submission to HMRC


Your last RTI submission should be ticked to indicate "Final submission of tax year".


This could be either a Full Payment Submission (FPS) or an Employer Payment Summary (EPS) depending on your payroll circumstances, it is important to understand this.  The flowchart below should help you gain an understanding. 


What is my final submission of the year? year end procedure overview


FPS:


Your last full payment submission (FPS) should be with HMRC on or before the employee's pay date as normal.  If you are unable to send your submission on or before the pay date this will be recognised as a late submission by HMRC.


EPS:


If required send your final EPS to HMRC by the 19th April 2019. 


Changes to the Process of Amending Earlier Year Payroll Data


Currently, if an error is identified in your payroll values for a previous tax year the only way to address this would be to use an EYU (Earlier Year Update) to correct the employees' records.


From April 2019 HMRC will be extending the use of the RTI Full Payment Submission (FPS) to allow employers to continue to report revised Year to Date (YTD) payment data after the current deadline of the 19th April, following the end of the Tax Year.


From 20 April 2019 HMRC will be accepting RTI FPS’s with YTD information to make amendments to the Tax Year 18/19. HMRC will still accept an EYU to make amendments to this tax year. In this transition year, if you need to make amendments to your 18/19 payroll data you will need to choose to send either an EYU or an FPS for amendments and continue with this for any further amendments to the year as required.


From April 2020 the EYU will no longer be a valid submission to make amendment to the Tax Year ending 05 April 2020 and any amendments will need to be made using an FPS.


 Amendments to the Tax Year ending 05 April 2019 from 20 April 2019 – an EYU or FPS will be accepted. This is to be a pilot year and the use of the FPS after the year end will be voluntary.
 Amendments to the Tax Year ending 05 April 2020 (and future years) from 20 April 2020 – will be made by the submission of an FPS
 Amendments to Tax Years ending 05 April 2018 and earlier – will be made by the submission on an EYU
 The Employer Payment Summary (EPS) will not be impacted by this change.


Final Submission Questions and Declarations:


HMRC has notified all software developers that they do not require the traditional end of year Questions and Declarations any longer. As such this step has been removed from the end of year processes in your payroll software. 



Update your payroll software:


Before you can process payroll in the 2019/20 tax year you will need to apply the end of year updates we will provide.  These updates are now available.


Depending on your payroll software it may be available via our auto update service, keep a look out for update prompts from the end of February.


Alternatively, you can check to see if an update is available here:  www.iris.co.uk/update


You can install the update as soon as it is available for your software. The update will NOT affect any payrolls still open in the 2018/19 tax year.


Move your payroll into the new tax year


This process depends on which payroll software you are using, please refer to the product specific guides below.


PAYE-Master (Tax Year 19/20 Version)
Payroll Business (Tax Year 19/20 Version)
Bureau Payroll (Tax Year 19/20 Version)
GP Payroll (Tax Year 19/20 Version)
Payroll Professional (Tax Year 19/20 Version)
Earnie (Tax Year 19/20 Version)
Earnie IQ (Tax Year 19/20 Version)


Please Note:  We strongly recommend that you create a separate backup of your payroll data after you have completed your final payroll of the 2018/19 tax year BEFORE you move into the new tax year. 


Earnie IQ Users - We recommend you use the copy company option in the admin mode to ensure you have a separate company listing for the PAYE data for 18/19 before you move into the new tax year.



Update your employee records


Before running any payroll for the 2019/20 tax year you need to ensure your employee tax codes are up to date.  For April 2019 the standard tax code uplift for employees on L based tax codes is 65 points. The emergency tax code for 2019/20 becoming 1250L wk/mnth 1. M suffix tax codes will increase by 71 points while N suffix codes will increase by 59 points.


Please look out for prompts about updating tax codes when performing your year-end restart procedure. Product specific instructions can be found in the software year end guides.


HMRC may issue tax code notices for specific employees. If this is the case these tax codes overrule the standard uplift:


• P9T form for any employees who need a new tax code


• P9X form with general changes for employees whose tax code ends with an ‘L’


Depending on which of our payroll programs you are using, these may be delivered directly into your software for automatic processing. Refer to the product-specific year end guide in your software for further details.


Uplift AE Pension contributions


For the 2019/20 tax year, the minimum AE pension contributions are going up, you will need to ensure you are meeting the minimum contributions to comply with legislation.


Minimum contributions are changing in line with the table below:



For assistance actioning these changes in your payroll software please refer to the following guides:


Payroll Professional & Earnie; click here
Payroll Business & Bureau Payroll; click here
GP Payroll; click here
PAYE-Master; click here



Give employees a P60


P60 reports should be received by employees by the 31st May. 


Any employee who was working for you on the 5th April should get a P60.


Leavers within the 2018/19 tax year (i.e. before the 5th April) will not get a P60, these employees should have already been provided with a P45 when they left your employment. 


P60 reports can be produced onto pre-printed stationary or published online via OpenPayslips if you use that service. Some of our payroll software has the option to print the P60 as a plain paper report, this prints the entire form (values and formatting) onto plain A4 paper (HMRC accredited). Refer to the product-specific year end guide in your software for further details.


To produce P60 reports in the correct format for the tax year you will need to install the year end update before printing/publishing your P60's.



Report expenses and benefits


These are reported to HMRC on a form P11D.  The P11D is a statutory form required by HMRC from UK based employers detailing the cash equivalents of benefits and expenses that they have provided during the tax year to their directors and employees. These are NOT submitted via our payroll software and require specialist P11D software.


If P11D forms are due they should be with HMRC by 6th July.


Any Class 1A National Insurance due on the taxable expenses and benefits you’ve provided must be paid to HMRC by 22 July (or 19 July if you’re paying by post).



For a summary of some key PAYE changes for 2019/2020 tax year, click here



Looking for more help and support for your business? We run free training webinars throughout the month covering a wide range of subjects such as auto enrolment and holiday pay; you’re bound to find one that suits you.

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