End of tax year payroll procedures

As the 2021/22 tax year has now ended, employers need to carry out the following end of year procedures:

• Provide your employees with their P60 annual summaries by 31 May 2022;
• Prepare forms P11D for employees’ expenses and benefits by 5 July 2022;
• Update your employees’ payroll data for 2022/23, in particular their new tax codes; and
• Update your payroll software for 2022/23 if you haven’t already done so.

Here is a link to the HMRC guidance: Payroll: annual reporting and tasks: Overview - GOV.UK (https://www.gov.uk/payroll-annual-reporting). Please talk to us about your payroll – we would be delighted to help!

Payrolling Benefits in Kind

HMRC are encouraging more employers to payroll employee benefits in kind rather than declaring benefits on the end of year P11D. They have included guidance on registering to use the scheme in their latest employer bulletin.

If employers haven’t already done so they should register online now or before 5 April 2022 to payroll employee benefits for the 2022/23 tax year.

The advantages of payrolling benefits in kind are:

• employers no longer need to submit P11D and P46(Car) forms to HMRC
• simpler PAYE codes mean HR teams receive fewer queries from employees regarding tax
• tax deductions in monthly payroll will be more accurate
• tax codes for individuals should change less frequently
• fewer forms for employers to complete at year-end

If you are not yet in a position to move to payrolling you can still move away from legacy paper P11D forms by submitting them online.

Payroll Weston super Mare

Payroll / operating a PAYE scheme

A brief introduction to the Pay As You Earn Scheme:

The PAYE regime is the system of tax collection where employers deduct income tax and national insurance contributions (NICs) from an employees wage. This can be deducted weekly or monthly.

The PAYE system was originally designed to be a simple method of collecting tax at source, however over the years is has become increasingly more complicated with a variety of tax codes being introduced. Cases of employees paying too much or too little tax has become more common in recent years.