A checklist for year-end payroll 2024/25: what to do and when
A checklist for year-end payroll 2024/25: what to do and when
It’d be one thing if payroll year-end meant a single last pay run. During this busy period, HMRC rules must be followed while meeting numerous deadlines.
It can be tricky to manage payroll at year-end, regardless of how experienced you are. Detailed instructions are provided below:
When does HMRC's payroll year-end occur?
An organization's payroll records are finalized at payroll year-end. Basically, you're closing out your payroll for the period: you're reporting to HMRC how much you've paid your employees and how much you've deducted, which is necessary prior to starting a new tax year.
A Full Payment Submission (FPS) and possibly an Employer Payment Summary (EPS) are required to be sent to HMRC every 12 months following your final pay run. P60s must also be issued to employees and tax codes must be adjusted for the new year.
What you need to know about year-end
1. Make sure your payroll ends on time
It is usually the 5th of April that payroll year-ends. Every business pays their employees according to their own schedule, so some pay monthly, others weekly, or within a weekly multiple. It is possible to do payroll year-end before 5 April. The final pay day of your employees for the current year (which will most likely be before 5 April) is the deadline for submitting reports to HMRC.
This is a process that shouldn't be rushed. Check your information before you submit so you don't need to make adjustments later.
2. Ensure that leavers and new hires have been verified
A new employee may have joined the company, while others may have left. This is the best time of year to find out exactly who is on the payroll. Keep managers informed so that no dates or deadlines are missed.
The timing of a project is crucial. Otherwise, you may tie yourself in knots trying to amend your Employer Payment Summary (EPS) or Full Payment Submission (FPS).
3. Make your final payroll
The final pay run will be just as you've done throughout the tax year. A nil pay run must be processed if no employees need to be paid.
It is important to note that the payment date must fall in month 12 (generally between 6 March and 5 April).
You need to send the final FPS and, if needed, EPS by 19 April once you have performed your final pay run. Make sure you double check your submissions before the deadline to avoid any errors.
4. Complete the payroll year-end process
Your year-end payroll will be processed by most payroll software. In this case, Xero will submit your final EPS to HMRC automatically if you completed your final pay run before 19 April. During the 12-19th of the month, this will take place in time for the deadline of 19 April. In your EPS, Xero will record the cease date you set.
If you need to make a correction or forget to make a claim, you must do so by 19 April.
5. Prepare P60s and distribute them
In a P60, employees are able to see their earnings, as well as their taxes and NI contributions for the past year.
On the last day of the tax year, every employee who worked for a business must receive a P60 by 31 May. This document must be provided by the employer by the deadline. P60s are issued once the final payslip is completed and any corrections are made.
By the end of March, Xero payroll will have P60s available.
6. Beginning of the new payroll year
Now that you have submitted your HMRC submission and filed your P60s, you are all set. Looking at the P9X will help you prepare for the new payroll year. To update your processes from 6 April, you'll need this government document that tells you the latest personal allowances and tax codes.
Even if your software includes certain thresholds and processes, it's a good idea to verify them. In this way, you can rest assured that everything is in order. Take note of the following, for instance:
Student loan repayment thresholds and postgraduate loan repayment thresholds
You must renew CA2700 certificates every year before you can process an employee's pay for the next tax year
Make sure employees are not eligible to receive a change in their childcare voucher value. A Basic Earnings Assessment (BEA) must be completed by an employer in advance of the first pay period in a new tax year, according to HMRC
Dates and deadlines for payroll year-end 2025
When keeping track of important deadlines, calendar reminders can be very helpful. You might want to set up alerts for the following to give yourself enough warning:
5 April 2025: 2024/25 tax year-end
5 April: The last day to update your employee payroll records and your payroll software
6 April: The new tax year for 2025/26 begins
19 April: The deadline for the final submission of the 2024/25 tax year
22 April: The deadline for month 12 PAYE
31 May: The deadline to send your employees their P60s
6 July: The deadline to report on expenses and benefits (using your payroll software if applicable)
6 July: The deadline to submit your P11D and P11D(b) forms
22 July: The deadline for payments of class 1A National Insurance Contributions on benefits in kind to HMRC (If you’re not using digital systems, the deadline is 19 July)
Payroll year-end should be streamlined
Payroll at the end of the year requires preparation. A smoother year-end process can be achieved by understanding common challenges and overcoming them.
A payroll software that is HMRC-recognised, like Xero, can streamline payroll and simplify compliance. RTI submissions are automated, payroll calculations are automated, and adjustments are simple. For seamless collaboration, you can access all necessary data securely from anywhere, anytime, in one place. With less stress and greater confidence, payroll becomes smoother.
For support with your payroll and accounting requirements, contact Zyla Accountants today.