It’s that time of year again when the financial year comes to an end. Are you, as an employer, ready for the financial year 2016/17 to end and have you considered the implications on your payroll?
Since the introduction of RTI in April 2013, it is fair to say the year end process is simpler than ever before. The submission of a P14/P35 is no longer required. However, being complacent and underestimating your employer obligations is definitely not recommended! Under RTI, there are some subtle differences to be aware of that require to be completed by the deadlines set by HMRC.
The first thing to remember is to submit your final Full Payment Submission/Employer Payment Summary by the 19th April. This is to ensure that HMRC are aware of each employee’s Income Tax and National Insurance liability for the year and allows HMRC to check that they have been deducted and paid over correctly.
Once everything has been sent to HMRC, you will then have to ensure that all of your employees’ personal details and tax codes are correct and ready for the new tax year. We recommend an annual year end data cleanse to confirm that the data held on your system for each employee is still accurate and up to date. Once you are satisfied that all information is correct, you then need to make sure that your payroll software or payroll provider’s software has been updated for the coming tax year and is ready to handle the various RTI changes that have come into force.
However, compliance doesn’t end there. You also have to ensure that your employees receive their P60s by the 31st May, along with any relevant statements of income, if employees have had foreign tax withheld and paid on their behalf.
If taxable benefits are not processed through the payroll, then you will have to complete a P11D by the 6th July and then make payment of Class 1A NIC due on the benefits by the 22nd July.
In addition, you may also have to look at completing a PAYE Settlement Agreement (PSA) for any staff gift or entertaining on which you do not wish your employees to suffer the tax. The PSA agreement needs to be approved by HMRC ahead of the P11D submission deadline of 6th July.
If you fail to meet these deadlines, then there is always a risk of incurring penalties from HMRC.
If you have any questions regarding the information above, please contact email@example.com or your usual AAB contact.