The payroll tasks which must be completed at the end of the tax year are more straightforward than they were before the introduction of Real Time Information reporting, but there are still a number of tasks and deadlines to be aware of.
Final Submission for the Current Tax Year
The final payroll must be processed on or before 5 April 2022, in line with the usual pay date. The final submission via Real Time Information is required by 19 April 2022.
Documents for Employees
P60 forms must be prepared and issued to employees by 31 May 2022.
Preparing the Payroll for the New Tax Year
A number of elements should be updated before processing the first payroll of the new tax year, including:
- Updating employee tax codes – for 2022/23, the personal allowance is not changing and so a global uplift does not need to be applied, but any P9 tax code notifications received from HM Revenue & Customs must be applied and any Week 1/Month 1 flags need to be cleared so tax codes operate on a cumulative basis.
- Ensuring payroll software is up to date – most software providers issue a legislation update towards the start of the new tax year. You will need to ensure the software is up to date and contains the correct legislation and thresholds before processing the payroll, so that all tax, National Insurance, Student Loan and pension deductions are calculated correctly.
- Updating pay rates – the National Minimum and Living Wage rates are due to increase again this year and so the new rates need to be actioned for any employees paid at these rates in the first pay reference period after 1 April 2022.
Checking Eligibility for Allowances for the New Tax Year
Some companies are entitled to receive Small Employer Relief and the Employment Allowance, but eligibility must be checked each year and, if eligible, these need to be applied for via the payroll software.
- Small Employer Relief – this allowance enables smaller employers to reclaim 103% of Statutory Maternity, Paternity, Adoption, Parental Bereavement and Shared Parental Pay, rather than the usual 92%. Eligibility can be checked by totalling the Class 1 National Insurance (excluding Employment Allowance saving) for the 2021/22 tax year. If this falls below the threshold of £45,000, select the option in the payroll software to claim for 2022/23.
- Employment Allowance – this allowance enables employers to save up to £4,000 in Employer National Insurance contributions per tax year. The eligibility criteria requires the total Employer National Insurance to be under the threshold of £100,000 for the 2021/22 tax year for the company or group of companies. Additional criteria require the payroll to consist of more than a sole director and for the company to not have exceeded various thresholds for de minimis state aid, depending on the sector the company operates within.
For more information or any assistance you may require with running your own payroll end of year procedures, please contact our Payroll Managers Rita Jankauske and Sadie Leadbetter at email@example.com.