Managing Your Cash Flow
Getting ready for payroll year end – the vital considerations
4 min read
12 February 2018
Payroll year end is nearly upon us, and some business owners will be eyeing its approach with dread – but this need not be the case with some simple steps.
The end of the tax year is fast approaching, and it is a good time for business owners to start putting together their to-do lists – including payroll year end.
By engaging with tailored software and tools, it can be a fairly simple process to run payroll year end. However, as with most business processes, there are always a few things you ought to know so you don’t get caught out.
Raj Sond, GM at processing and payment solutions company First Data UK, commentedsaid: “Pay is probably the most emotive subject for staff in any organisation and can be a laborious task for an already time-poor business owner.
“But the burden of payroll can be tackled through technology. This allows business owners to stay on top of important data, even when out of the office, and ensure staff get paid correctly – and on time.”
Here, we’ve rounded a few key things to be aware of.
First thing’s first – are you signed up and able to log in to Government Gateway? This is the service that allows businesses to access government services online. You need to ensure that your account is active before you will be able to make any submissions.
Check your payday
If you are paying any employees on 5 April, you will have an extra pay run. This will be your final run of the year. Your final pay run must be completed before you can run your year end.
Don’t run it too soon
In small and medium-sized businesses, when you’re juggling a million and one things at a time, the temptation is sometimes to try and get ahead of the game and get your end of year filed well ahead of time. While you are allowed to file it early, doing it too early can cause you problems – for example, if an employee leaves the business, or their tax code changes.
By all means stay on top of things, but don’t file too early and risk having to do it all over again after processing leavers.
Once you have submitted your Full Payment Submissions (FPS) and/or Employer Payment Summary, and claimed any reductions, you will be able to view what you’ve claimed and the balance owed on your HMRC online account.
HMRC will contact you if you have missed payment or paid late – there is a daily interest charge at a rate of 2.75 per cent, and a penalty can be given.
Handing out P60s
Some payroll software will enable business owners to create PDFs to distribute to employees, but failing that, copies can be ordered from HMRC. Make sure you order the right amount and get them to your employees by 31 May.
Remember, every employee that has been working at a business up until 5 April must receive one. If an employee leaves on 5 April 5, they are still required to receive a P60.
It’s worth getting to grips with now, even if it’s too early to run your end of year now. Getting these vital considerations out of the way now will make the process all the smoother.