16th March 2016
In anticipation of the end of the tax year 2015 in April, we present 5 top tips to make this busy time a breeze.
The end of the tax year is fast approaching, which means you need to get cracking on preparations for your final Full Payment Submission (FPS). How are you feeling about this? Are you calm and collected – confident you’ll have everything in order for a successful PAYE submission? Or are you silently stressing – feeling overwhelmed with critical business deadlines on top of end of year payroll processing targets?
If you’re worried about being an April Fool and making mistakes, we have 5 end of year payroll tips to help you submit your final PAYE accurately, on time, and as smoothly as possible.
Verify Employee Information
It’s absolutely crucial that you all your employees’ personal data – such as their address and full name – are accurate before you submit your FPS. This should be your first priority during end of year payroll prep. If the information you provide is different to the information held by the HMRC, it can lead to the creation of duplicate employment records. This can cause a lot of trouble, as it will affect an employee’s tax code and deductions, such as student loan repayments and National Insurance Contributions.
For each employee being paid, all of the following details should be included in your FPS:
- Name
- National Insurance Number
- Date of birth
- Gross pay
- Deductions
Check Your PAYE Reference Number
It may sound obvious, but one of the biggest P14 errors employers make each year when submitting their FPS is using an invalid PAYE reference number. Make sure you confirm you’re using the right numbers well ahead of the submission date, and that you know how to enter them correctly into the two separate fields onto the P14.
Do You Need To Send an EPS?
An important part of year end payroll prep is making sure you are submitting all the right information to the HMRC based on your current payroll circumstances. For example, you may be required to submit an employee payment summary (EPS), especially if you do not intend to send a FPS because you won’t be paying anyone in the final pay period of the tax year. An EPS will also need to be sent if you need to inform HMRC of any changes to your monthly or quarterly payments as a result of:
- Statutory payments recovered (i.e. maternity or paternity pay).
- Any related National Insurance compensation.
- Tax being withheld under the Construction Industry Scheme (CIS).
Be sure to thoroughly check the HMRC guidelines to ensure you know exactly what reports you need to submit and when.
Consider Week 53, 54 or 56 Payments
2016 is a leap year, so if you run weekly, 2-weekly or 4-weekly payrolls – and your normal pay date falls on the 4th or 5th of April – you will have an additional period to process payroll for the end of the tax year. Therefore, if you run a weekly payroll, your final pay period for 2015/16 will be week 53. If you run a 2-weekly payroll it will fall on week 54, and if you run 4-weekly payrolls it will fall on week 56. If your normal repeating pay date does not fall on either the 4th or 5th, your last period will be week 52. It’s vital that you check when your pay date is well in advance to avoid making any mistakes.
Can’t Find Peace & Quiet?
As end of year payroll processing is anything but simple, we recommend finding a quiet area where you can concentrate and prepare properly without any distractions. A few minutes of thinking time might not be enough, but it is important to do the relevant calculations (such as bonuses, leave and pay and leave balances) and get your head around the key steps you need to follow and important information you’ll need to submit. Make sure you carefully review HMRC annual reporting tasks and all the key deadline dates for the end of the tax year.
So don’t be an April fool, make sure your end of year payroll is submitted without a hitch with IRIS FMP Payroll’s handy tips.
What else is going on in 2016? Read our latest eBook to find out…
TOP TEN ISSUES FOR 2016 DOWNLOAD
| Payroll End of Year Reporting Checklist | Deadline |
| Send your final payroll report of the year | By 5 April |
| Update employee payroll records using the right tax codes | From 6 April |
| Update your payroll software or download Basic PAYE Tools | From 6 April |
| Give your employees a P60 | By 31 May |
| Report employee expenses and benefits | By 6 July |
