Payroll year end can be stressful when you’re balancing deadlines with normal business tasks and activities.

2016_MAR_UK_TAX - Xero Payroll helps you get ready for payroll year end in the UK

To ensure you meet your payroll year end tasks, we’ve released updates to Xero Payroll including:

  • Download your employee P60s and/or email them as an email attachment directly to employees
  • P11 report is now available
  • Automatically updating employees on the 1060L tax code to 1100L for the new payroll year
  • Support for Scottish Tax Codes
  • Update to the Employment Allowance to £3000 for the 2016/2017 year
  • Automatically indicating the final year report to HMRC via RTI

See more release information here and read below.

Join us for a free webinar in which we’ll take you through a range of tips to streamline your payroll year end processing in Xero. This will include account reconciliation, P60, P11 and more. They are free for everyone. You can also access the Essential Checks: Payroll Year End video series in Xero U to take you through an end of year payroll review.

Payroll year end checklist

As an employer running payroll, there are several things you need to do. Things like, reporting to HMRC on the previous tax year (which ends on 5 April), giving your employees a P60, and preparing for the new tax year, which starts on 6 April.

What you need to do When
Check opening balances entered correctly Now
Send your last FPS of the year On or before your employees’ payday
Update employee payroll records Before 6 April
Give your employees a P60 By 31 May

Opening Balances
If you switched to Xero Payroll from a different payroll software provider after the start of the year, you should have entered opening balances to ensure you claimed the correct amounts from HMRC throughout the tax year. To check whether you entered opening balances follow the instructions here.

If you did not enter opening balances and switched from another payroll provider after the start of the payroll year please watch this video before proceeding.="#158228490">

Send your final submission notification to HMRC
We will streamline final payroll reporting requirements for the year by automatically indicating on the EPS that we will be sending on the 12th April that it is the final report for the 2015/2016 payroll year.

Update employee payroll records
You’ll need to update your employee payroll records with any changes to tax codes, benefits, deductions or reimbursements. You should do this before you run the first pay run in the new year to avoid having any ongoing issues that would later need correcting. We will automatically update employees on the 1060L tax code to 1100L at the start of the new tax year. For any other tax code changes these will need to be manually updated. Including changing any employees who were on a non-cumulative code in the last period of 2015/16 to be cumulative for the start of 2016/17.

Payroll software updates
Xero Payroll takes care of all the updates for you including support for the Scottish Rate of Income Tax. If you have any employees who are Scottish taxpayers you will get a letter from HMRC with an updated Tax Code for them. You will need to manually change this in Xero.

Review employees P11s
As part of the year end routine you must review your employees’ pay to make sure their values and the information you submit are correct. You can do this using the P11 reports. You don’t submit these reports to HMRC, however, you must keep them for at least three years.

Give your employees their P60
You must give your employees a P60 before 31st May. With Xero Payroll you can download employee P60s and/or email them directly to employees as an email attachment

There is no better time of year to seek advice from a payroll professional or trusted advisor. Find a certified Xero advisor to help your business start the new payroll year off on the right foot.

Oliver Furniss Xero

Xero is beautiful, easy to use online accounting software for small businesses and their advisors. Xero provides business owners with real-time visibility of their financial position in a way that’s simple, smart and secure.