Happy new year

12 March 2018

This article was featured in the April 2018 issue of the magazine.

Kerry Crewe, senior business analyst at MHR, provides advice on achieving a successful tax year-end and a great start to the next year

Since the introduction of real time information in 2013, tax year-end has got a whole lot easier. Gone are the days of waiting until the end of the tax year with the backbreaking task of trying to reconcile twelve months of payroll data into one balanced submission.  However, there are still things which need doing, and deadlines to observe.


Know your dates and plan accordingly

There are many deadline dates to consider at tax year-end and it’s important not to miss any as this could incur financial penalties.

  •  Tax year-end 5 April – Your pay as you earn (PAYE) reporting is to include all payments made between 6 April 2017 and 5 April 2018.

  • Full payment submission (FPS) – Your final FPS for 2017–18 must be submitted on or before pay day.  HM Revenue & Customs (HMRC) still find that some employers hold off submitting the final FPS until the end of the tax year, which is incorrect. The final FPS does not directly relate to the tax year-end and must be submitted in line with the pay date. Your payroll system may provide the opportunity to specify this FPS to be flagged as the final submission for the year.

  • Employer payment summary (EPS) – HMRC require your final EPS (if you need to send one) by 19 April. This EPS will indicate it is the final submission for the year.  It is ideal to leave submitting this EPS as close to the deadline as possible as it will then include any adjustments you may have made as part of year-end processing.

  • Additional FPS up to 19 April – You may need this to adjust employee records after the tax year-end, for example to reflect adjustment/recovery of overpayments or a late starter who was paid outside of your software in the 2017–18 tax year.

  • Earlier year update (EYU) after 19 April – The difference between a FPS at tax year-end and the EYU is that the FPS reports the latest year-to-date (YTD) figures values whereas the EYU reports the difference between the latest YTD value and the previously reported value.  Most systems have the capability to produce an EYU; however, HRMC’s basic PAYE tool can be utilised if your payroll software is unable to produce this.

  • P60 certificate – All employees need to receive a P60 certificate by 31 May, either paper or electronic.

  • P11D return – The deadline for submission of these returns to HMRC and to employees is 6 July.

  • Gender pay gap reporting – Employers with over 250 employees must report their gender pay gap.  This is based on a snapshot of data as at the previous year. 

The deadline for reporting is 30 March for the public sector and 4 April for the private sector.


...pay in lieu of notice is now subject to PAYE regardless of contractual stipulations


Ensure systems are up to date and ready

All payroll software will have some form of update that will include upcoming rules and rates for the new tax year.  Before processing your first payment in the new tax year, it is imperative that systems are up to date. 

Look out for any late-breaking changes that may affect paying your employees, like Scottish tax rates for example.  Along with the standard tax code uplift for L, M and N suffix codes, HMRC will also issue P9 coding notices for some employees, which will need applying prior to first payment in the new tax year.  

New for 2018–19 is the reporting of illness benefit lump sums for those over age 75 (pensioners) in the FPS.  Also, pay in lieu of notice is now subject to PAYE regardless of contractual stipulations.


Think about the future

When you take a breath once year-end has passed, give yourself time to reflect and see if there’s anything that could be improved.  For example, if you’re still producing paper P60 certificates, could you switch to electronic supply?  

Whilst it may be too late for this year – as you must notify HMRC before the start of the tax year – can you plan to move your benefits into ‘payrolling’ in future years, negating the need to produce P11D returns? 

All in all, tax year-end is far less daunting than it was five years ago and nowadays we barely break into sweat over it. However, the best advice that any payroll professional would probably give is to take a little bit of time each pay period to reconcile your transmission to your payroll outputs and know your deadlines.