Payroll 2020 year end is fast approaching and no doubt it will be a time when many of you will begin to worry over the challenges you face. Being well prepared is key. Which is why we have put together a checklist outlining what you need to remember and how you can prepare.
Here Is Your Payroll Year End Checklist:
Prepare for Week 53 and Leap Year
If your regular pay date for weekly, fortnightly or four-weekly falls on 4 April or 5 April 2020, your payroll software should automatically trigger an additional tax period. As the annual personal allowance is already used up by period 52, 26 or 12, employees are effectively not entitled to any more tax -free pay for that year. The way that this is overcome, is a week 1 tax code is used and previous pay and tax issues are ignored. This may result in an underpayment of tax resulting in HMRC issuing a P800 to employees if required.
You will need to check that the additional period has been triggered and accounted for correctly. In addition to this issue, 2020’s leap year can present an extra challenge with 29 days in the month as opposed to the usual 28. This needs to be considered if employees are paid based on daily rates.
You will also need to ensure payroll systems are correctly configured to recognise 29 February and that any necessary adjustments are made to payroll deductions and benefits contributions.
Process Your Leavers
You will need to process your leavers ahead of your year-end submission. This will need to be done for anyone who has left the business since the last payroll year end date and can be done by entering their last working day into your payroll software. They must be marked as a leaver prior to updating their final payment and submitting the Full Payment Submission (FPS).
You should also check and pay any outstanding amounts due such as holiday pay.
Provide a P60
Each employee who is still working with you on 5 April will need to be provided with a P60 which summarises their pay and deductions over the last tax year. The P60 must be given to each employee before 31 May.
Send the Final FPS
At year end you will complete your final pay run which will include your last Full Payment Submission (FPS) for the tax year. An FPS is a submission that you need to make to HMRC every time you pay your team. You may also need to provide an EPS which is used to report values to HMRC that cannot be included on the FPS. For example, if you need to reclaim statutory payments or didn’t pay anyone for one or more full tax months then you’ll need to send an EPS (Employer Payment Summary).
If you need help with your 2020 payroll year end, contact an expert payroll services provider who will be able to assist and deliver on every level. Specialists in this area will have knowledge of payroll-related tax laws, employment regulations and understand the latest government legislation.
Key Dates for Your Diary:
- On or before your employee’s payday: Send final FPS
- By 5 April: Register for payrolling of benefits for 2020/21
- From 6 April : Update employee payroll records
- From 6 April : Ensure payroll software is updated
- By 19 April: Send final EPS
- By 31 May: Give all current employees a P60
- By 1 June: Supply details of any benefits taxed through payroll to employees
- By 6 July : Report employee expenses and benefits if not being processed via payroll
- By 22 July: Pay class 1A NIC on P11D benefits
payroll paperwork -DepositPhotos