The new tax year starts on the 6th April, and as part of the end of year process there are a couple of things that need to be considered when moving your payroll into the new tax year along with the deadlines associated.
- Send your final payroll report for the tax year.
- Give your employees a P60.
1. Final Payroll Report.
When you have finished processing all of your pay runs for the year you need to notify HMRC, this is done within the RTI files by sending a 'final submission indicator'. When this is sent HMRC will not expect any further submissions for that tax year and will effectively close the payroll for that year.
The system will automatically populate this flag if it thinks you are running your final pay run for the tax year e.g month 12 (this can be unticked if required). If for any reason you miss sending this in the full payment summary (FPS) for your final run you can set this flag within the employment payment summary (EPS).
NOTE: If you are processing multiple payment frequencies under the same PAYE reference flag the final pay run in the last FPS you send.
The deadline for the final submission to be filed with HMRC is the 19th April 2020 which falls on a Sunday this year.
2. P60.
When you have processed the final pay run for the tax year you can then issue P60s to employees (this is only required for employees in employment on the 5th April, employees that have left before this date will have received a P45 instead) more information can be found in the link below.
The deadline for P60s to be issued to employees is 31st May 2020.
New Tax Year 2020/21.
As with any new tax year there are generally a number of changes or uplifts to thresholds, payment rates and tax code uplifts. Any changes will be applied automatically to the software.
- Tax code uplifts - There are no uplifts for the new tax year with the default tax code remaining as 1250L
- Tax thresholds.
- Scotland - Increase to tax thresholds.
- Wales - No change.
- UK - No change.
- National Insurance.
- Thresholds have increased with the primary and secondary thresholds now no longer aligned.
- % rates have remained the same.
- National Minimum Wage rates have been increased from April 1st, 25 + rate £8.72
- Statutory Sick Pay has increased to £95.85.
- Statutory leave payments have increased to £151.20
- Student Loan plan 1 and 2 earnings thresholds have increased to £19390 and £26575.
- Postgraduate loan - No change.
- Automatic enrolment - Still to be confirmed.
- Employment Allowance - This has now been reclassified as state aid, if you want to claim this you now have to complete the state aid sector the business belongs to. More information about setting this up in the software is available in the link below.
It is worth noting when your Statutory Maternity Pay spans a tax year the new rates will be changed automatically for the new tax year, but it is worth checking when these are applied and the previous payments you have made. If the new SMP rate is higher than the 9/10ths earnings (first 6 weeks payments) of SMP HMRC rules are that the lower rate is applicable. You would need to make the appropriate adjustment using the SMP adjust field. For more information please use the link