The new tax year starts on the 6th April, as part of the year end process there are a couple of things that need to be considered going into the new tax year along with the deadlines associated.
- Submit your final payroll RTI file for the tax year
- Provide employees with a P60
- Roll forward any benefits.
What you need to do
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 submitted 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 the final pay run indicator if it is the last period of 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 pay run you can manuallyset this flag within the employment payment summary (EPS) to notify HMRC instead.
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 2023.
When you have processed and finalised the last 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) guidance for P60s can be found
Helpful Hint
If the pay run is automated, and the option to send employee notifications has been selected, then P60s will be published automatically. Further guidance on pay run automation can be found here.
The deadline for P60s to be issued to employees is 31st May 2023.An action item will be created in the dashboard to remind you of this.
Updates applicable for the new tax year. These will be applied automatically unless stated otherwise.
- Tax code uplifts - There are no uplifts for 23/24 tax year, standard/emergency tax code remains at 1257L. Week 1/month 1 status will be cleared down when you create your first pay run in the new tax year, please allow extra time for this process.
- Tax thresholds - Slight change to England/Northern Ireland and Wales, percentage thresholds remain the same but additional rate now kicks in at £125140 above. Scotland's higher rate tax has increased to 42% with the top rate now at 47% and a threshold of £125140 above.
- National insurance - % rates, these carry over with the obvious reduction of the 1.25% 'Health and social care levy'. Employee 12% to UEL, 2% above, Employer 13.8%. The same rates will apply to Directors going forward.
- National Minimum Wage/National Living Wage from April 1st, 23+ rate £10.42 with weekly accommodation at £63.70.
- Statutory Sick Pay increased to £109.40.
- Statutory Parental Pay increased to £172.48 applicable from April 2nd.
- Student loan plan 1 earning threshold increased to £22015, plan 2 and postgraduate loans no change. Scottish student loan plan 4 increased earnings threshold of £27660.
- Automatic enrolment - No change, earnings trigger remains at £10000.
- Employment Allowance - remains at £5000. For the 2023/24 tax year we have copied over any previous settings that have been applied for Employment Allowance, these settings need to be checked to ensure they still apply. Guidance can be found here.<
- Scottish earnings arrestment - new rates have been published for April 2023.
- Flat rate van benefit charge increases to £3960.
- Flat rate van fuel benefit charge increases to £757.
- Car fuel benefit multiplier increases to £27800.
- If you have a director set up in the payroll using the standard annual calculation method, at month 12 the system will calculate any National Insurance due based on the earnings for the whole year. This final reassessment is to ensure the correct deductions have been made for the full year. Earnings for 2022/23 will be based on the blended Niable rate.
- When creating a pay run it is the pay date that determines the tax period, so any pay runs with a pay date of the 6th April onwards will be created in the new tax year.
- If you have published the P60s and then process a pay run for the tax year they cover, you will need to re-publish any employee P60s affected.
- If you need to make any changes to the payroll after you have sent the final FPS guidance for this can be found here.
- National minimum wage increases apply to the next full pay reference period after the 6th April, this is not necessarily the next pay date after the 6th April.