Week 53 payments
What to do if you miss the P60 deadline
Expenses and benefits forms
Starting a new tax year
As you approach the end of the tax year, you should think about whether you have any week 53 payment issues. See our website for more information on this.
You should send your final Full Payment Submission (FPS) of the tax year (which ends on 5 April) on or before your employees’ last payday of the tax year as normal. If you are unable to send your submission on or before the pay date this will be recognised as a late submission by HMRC. Saying that, they will accept your final FPS until the 19th April (this is the EPS filing deadline also) – after that date you will not be able to file an FPS.
If you still need to send payroll information but are too late to send an FPS or find you need to make a correction to an employee’s record and this doesn’t come to light until after 19 April, then you should use an Earlier Years Update (EYU). The EYU should show the difference between the last reported final figure and the correct final figure(s) for the tax year. For example, if a figure previously reported as £1,900 should have been £2,300, the EYU should show ‘£400’ – not £2,300. Similarly, if you want to reduce a figure previously reported as, say, £1,000 to £700, the EYU should report ‘-£300’ – with a minus sign in front – not £700.
You should send an EYU by 19 May. You can send an EYU after this, but you may run the risk of a penalty.
Many employers who need to send an EYU will find that their payroll software already includes that functionality. However, some employers will find that their payroll software does not include the EYU functionality. In that case employers may choose to submit an EYU using HMRC's Basic PAYE Tools (BPT).
If you do use HMRC’s BPT software to send an EYU, then you can find a guide that gives you step by step help on GOV.UK. It contains examples of the screens you will see in BPT and simple to follow instructions.
If you are an online filer, when it comes to the end of the tax year, you will need to tell HMRC that you have made your ‘Final submission for year’ via your payroll software.
Usually you do this at the same time as you submit your final FPS, however sometimes, depending on the circumstances, you will do this via an Employer Payment Summary (EPS) (e.g. where you didn’t pay anyone in the final pay period of the tax year).
Users of HMRC’s Basic PAYE Tools (BPT) should check the user guide which contains step-by-step help on the most common functions of BPT, including how to make final submissions for the tax year. Please be advised that in BPT you submit a report telling HMRC you have made your final submission as a separate step to sending the actual final submission.
For more on finishing the tax year, including what to do if you make a mistake in your final FPS of the year, see the GOV.UK guidance.
If you are paper filer, to finish the tax year you should just complete form RT2/RT5 as normal. More information on end of year tasks is available in booklet RT7 – Guidance for employers exempt from filing Real Time Information online.
Please note there are no longer any further questions or declarations to complete for HMRC at the end of the tax year.
Whether you are an online filer or a paper filer, you will need to give a P60 to all employees on your payroll who are working for you on the last day of the tax year (5 April). Leavers within the tax year (i.e. before the 5th April) will not get a P60 – these employees should have already been provided with a P45 when they left your employment.
The P60 confirms an employee's final tax code and shows their total earnings for the year, as well as the year's total tax deductions and National Insurance contributions. You must give your employees a P60 by 31 May, so 31st May 2018 for the 2017/18 tax year, 31st May 2019 for the 2018/19 tax year and so on.
Payroll software normally automatically produce P60s, however if it doesn’t, or if you are a paper filer, you can order copies from HMRC.
Users of HMRC’s Basic PAYE Tools (BPT) should check the user guide which contains step by step help on the most common functions of BPT, including how to issue P60s.
You should note that blank P60s are not available from HMRC's website. They are only available from the Employer Orderline or from HMRC’s online order page (choose the ‘manual completion’ option under ‘Finishing the tax year’).
Where necessary, employers may issue duplicate P60s – for example where an employee loses theirs – but they must be clearly marked as such.
If you miss the 31st May deadline, you should make sure you give your employee their P60 as soon as possible.
Strictly, HMRC have the discretion to charge an initial penalty of up to £300 per late form and can thereafter charge a further penalty of up to £60 per day for each day that the failure continues. However it is our understanding that provided you have taken action to remedy the oversight without delay, HMRC are unlikely to impose any such penalties.
If you provided your employees with taxable expenses or benefits during the tax year, you need to report these to HMRC by 6 July after the tax year in question – so 6 July 2018 for the 2017/18 tax year, 6 July 2019 for the 2018/19 tax year and so on. The employee then pays income tax on the P11D benefits through an amendment to their tax code (or in another way agreed with HMRC).
To report benefits and expenses to HMRC, use the following forms:
- P11D – for recording the expenses and benefits. (As well as sending a copy to HMRC, you will also need to give a copy of form P11D to employees, as appropriate, by 6 July. Employers may consider it appropriate to provide copy P11Ds to employees who left during the tax year, but they are not required to do so unless the employee makes a written request.)
- P11D(b) – for reporting the total amount of Class 1A National Insurance contributions (NICs) due. You add this up from all the forms P11D you have completed.
In July (on the 19th or 22nd – depending on your usual payment method) you also need to pay any Class 1A NICs that are due on the expenses or benefits. So if you have Class 1A NIC to pay for the tax year ended 5 April 2018 you will need to file the form P11D(b) by 6 July 2018 and make the payment by either 19 or 22 July 2018, depending on your method of payment.
There are penalties for the late submission of P11Ds and for any errors on the form. There are also penalties for the late submission of P11D(b)s and interest is charged on the late payment of Class 1A from the due date.
Dealing with benefits and expenses forms is not optional – if you have provided an employee with expenses or benefits that need to be reported, then you must send HMRC/your employee the appropriate form/s.
If you are an online filer, you can complete expenses and benefits forms via your payroll software, if it has this feature. For other reporting options, see GOV.UK (here you can find an online form which enables employers to submit end of year expenses and benefits forms P11D, and P11D(b) right up until the deadline).
Where no benefits have been paid during the tax year and a reminder is received (you may get one of these if HMRC are expecting a submission from you but you have not actually provided your employee with any benefits or expenses during the relevant tax year), employers can complete the ‘Employer – No return of Class 1A’ form to advise HMRC that they have no P11Ds to submit and no Class 1A return to make.
If you are a paper filer, you can download paper copies of the benefits and expenses forms you need from GOV.UK. Forms may only be available after the end of the relevant tax year.
If you are unable to download forms, you should contact the dedicated HMRC helpline on 0300 200 3205 and ask them how you can obtain the forms you need.
If you are an online filer, you’ll need to update your payroll software, so it uses the latest rates and thresholds for income tax, National Insurance, Student Loan repayments etc. You may receive an automatic update prompt to do this or you may need to update your payroll software manually – it will depend on the type of payroll software you use and you should follow their instructions. Your payroll software should then carry forward all of the relevant employer and employee information into the next year for you to save you having to set it all up again.
Users of HMRC’s Basic PAYE Tools (BPT) should check the user guide which contains step by step help on the most common functions of BPT, including how to activate a new tax year.
You also need to update your employee records, for example, identify and input the correct tax code to use in the new tax year. This will either be in accordance with the P9X form – which advises general changes for employees whose tax code ends with an ‘L’ or a P9T form, for any employees who need a specific new tax code. You will need to do this before you pay your employees in the new tax year.
HMRC should issue P9T forms between January and March about any new tax codes to use for employees in the new tax year.
If an employee’s tax code isn’t changing fundamentally and just needs uprating for the new personal allowance, HMRC won’t contact you separately and you should carry forward the employee’s tax code to the new tax year in accordance with the instructions on form P9X.
For more information on tax codes, including how you receive them, see our ‘tax codes’ section. Please note that there may be other non-tax changes that you need to implement for the beginning of the new tax year – e.g. changes to the minimum wage rate or increases in auto enrolment pension contributions.
It is worth saying that where possible, you should create a separate backup of your payroll data after you have completed your final payroll of the old tax year BEFORE you move into the new tax year.
If you are a paper filer, the key task in terms of setting up payroll records for the new tax year is to set up a form RT11 ‘Deductions Working Sheet’. For more information see booklet RT7 – Guidance for employers exempt from filing Real Time Information online.