The end of the 2019 tax year is fast approaching. Along with a raft of tax and regulation changes coming into force for the new tax year, employers and others responsible for managing payroll must ensure they meet their end of year payroll obligations and report any expenses and benefits to HMRC for the previous tax year.
In our latest blog post, we’ll run through the key obligations those that manage payroll must fulfil before and after the tax year ends on the 5th April 2019 to avoid non-compliance and ensure a successful end of year payroll run for your business.
Employee End of Year Payroll Obligations
To ensure a successful end of year payroll run, those responsible must ensure they:
- Send final payroll report for the previous year.
- Update employee payroll records.
- Update payroll software.
- Issue employees with a P60.
- Submit a P11D form for employee expenses and benefits.
Send Final Payroll Reports for the Year
Your final Full Payment Submission (FPS) should be sent on or before the last payday of the tax year. Full Payment Submissions can only be sent to HMRC through compliant payroll software so be sure to check yours is compatible and up to date.
Update Employee Payroll Records
From April 6th 2019, you will need to update employee payroll records for every employee that worked for you in the previous tax year and was paid any amount, regardless of how much or little. For each of these members of staff, you will need to:
- Prepare a payroll record.
- Identify the relevant tax code for each employee.
- Enter their tax code into payroll software.
When identifying the correct tax code for the new tax year, you can use the employee’s code for the previous year unless a P9T form is received from HMRC notifying you that an employee needs a new tax code.
Update Payroll Software
Rates and thresholds for Income Tax and National Insurance change almost every tax year, with increases to Income Tax thresholds and Personal Allowances coming in April 2019. Because of this, payroll software should be updated after each end of year payroll run to ensure it is calculating employee’s allowances and salary accurately for the forthcoming tax year.
Issue Employees with a P60
A P60 is a form given to employees at the end of a tax year which details all of their pay and any deductions made by PAYE including Income Tax, student loan payments and National Insurance throughout the previous tax year.
If you’re an employer, you will need to ensure that all employees on your payroll are issued a P60 by the 31st May.
If your business payroll software doesn’t automatically produce P60 forms, you can order them through HMRC.
Submit a P11D Form for Employee Expenses and Benefits
A P11D is a form submitted to HMRC to detail any expense payments and benefits in kind employees received across the previous tax year. The benefits in kind and expense payments which need to be included in a P11D form are:
- Assets transferred (cars, property, goods or other assets).
- Payments made on behalf of an employee.
- Vouchers and credit cards.
- Living accommodation.
- Mileage allowance payments not taxed at source.
- Cars and car fuel/vans and van fuel.
- Interest-free and low-interest
- Private medical treatment or insurance.
- Qualifying relocation expenses payments and benefits.
- Services supplied.
- Assets placed at the employee’s disposal.
- Other items such as subscription and professional fees.
- Expenses payments made on behalf of the employee.
If you’re an employer, you will need to ensure that a P11D form is supplied to HMRC for every employee who has been provided with expenses or benefits throughout the previous tax year by 6th July.
Payroll Experts Bristol
At FCF, we help businesses take the stress out of end of year accounting and payroll obligations. If you’re struggling with your end of year obligations or want to outsource your payroll and save time – we can help.
With a team of payroll experts and access to the latest software that’s compliant with HMRC, we’ve already helped countless businesses like yours simplify their payroll. Call us today on 0117 379 0810 to book in for a free no obligation consultation.
This post was written by Helen Moloney