In addition to all the other normal payroll tasks you need to complete every period, there are a few additional steps to the end of year process. Namely, HMRC need to know that the submission is the final one of the tax year, and P60s need to be issued to employees before 31st May.
Director’s National Insurance calculations
The Standard method, also known as Cumulative method, is typically used by Directors who are paid irregularly. As the National Insurance is calculated cumulatively, nothing extra needs to happen for the final submission of the year.
However, directors who are paid regularly, and use the Alternative (or Non-cumulative) method, have another step to calculate their final NI contributions. In the last period of the year, the amount of NICs due on their total NIC’able pay is calculated, their contributions to date are taken off, and any outstanding NI is deducted from their last payment. If they have overpaid NI, they will receive a refund. If a Director has been set up with the Alternative NI method in Paycircle, this calculation will happen automatically within the system.
Run the final period of the tax year
When you run the final period of a tax year, Paycircle will automatically put the Final submission for year indicator on the FPS for you. If no employees are being paid, this will go on the EPS.
Issue P60s to employee
Once the period is finalised, along with the normal reports and team member payslips, the system will also automatically generate P60s. Team members who view their documents from their own Paycircle employee portal will be able to download their P60 from here. P60s will also be available to download in bulk, for the whole team, for companies who don’t use the employee portal.
Uplift tax codes
Along with the issuing of P60s, any tax code amendments will also be made automatically. If there is a change to the personal allowance, then tax codes will be uplifted by the correct amount. For example a change in allowance from £12,500.00 to £12,570.00 will result in 1250L tax codes being uplifted to 1257L. W1M1 tax codes will also be changed to cumulative tax codes.