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Changes to Payroll End of Year Reporting

16 February 2015 by Crystal HR & Payroll Ltd

Completing the End Of Year Checklist is no longer mandatory

HMRC has published amended PAYE legislation which, amongst other things, means that it will no longer be mandatory for employers to complete the final report checklist data items 111 to 117 on their last Full Payment Submission (FPS) or Employer Payment Summary (EPS) for a tax year.

This change takes effect for PAYE reports made from 6 March 2015.

2015 news about paye legislation

HMRC recognise that some payroll software providers will not be able to change their products in time to take advantage of this. If in doubt, employers should check the position with their payroll software provider.

This change means that, from 6 March 2015 HMRC will accept a final FPS or EPS for a period from 6 April 2014 to 5 April 2016 with or without a completed checklist.

In cases where employers do have to complete the checklist to enable their software to actually make their final submission, they should ensure that they complete it accurately.

HMRC will remove these checklist items from their Basic PAYE Tools as soon as possible. Please note that this will probably not be until July 2015.

You must still file your final report of the year on time to avoid incurring a penalty. See the article on penalties on page 5 and What happens if you don’t report payroll information in time guidance for details.

Reporting benefits provided

The removal of the checklist does not affect an employer’s obligation to report on time:

  1. all expenses and benefits provided on forms P11D and P9D
  2. the amount of Class 1A National Insurance due on all the expenses and benefits provided on form P11D(b).

Where no benefits have been paid from 6 April 2014 to 5 April 2015 and a form P11D(b) or P11D(b) reminder is received, employers can either:

  1. submit a ‘nil’ return
  2. complete the ‘2014-15 Employer – No return of Class 1A’ form.

to advise HMRC that they have no P11D to submit and no Class 1A return to make. The online ‘no return to make’ form will be available from 6 April 2015.

The deadline for submitting returns of Expenses and Benefits forms [P11D, P9D and P11D(b)] is 6 July 2015.

Tips on preparing to make your final submissions for the tax year ending 5 April 2015

With April approaching, you need to start preparing to make your final PAYE submission for the tax year ending 5 April 2015.

HMRC use the information you send them in a number of ways: in the calculation of entitlement to state benefits and pensions; in relation to Tax Credits renewals; and to carry out reconciliation checks to ensure that you and your employees have paid the right amounts of Tax, National Insurance Contributions and Student Loan Deductions. If the information they hold is incomplete, the tax calculations they send to your employees may not be right – or their Tax Credits could be wrong – and HMRC may therefore need to contact you and your employees. This information is also used in the calculation of entitlement to state benefits and pensions.

There is guidance on how to submit this information successfully and you may find the following tips helpful. The list here is not exhaustive, but it should give you some high-level reminders:

  1. Your final Full Payment Submission (FPS) should be sent ‘on or before’ your last pay day of the tax year – which ends on 5 April
  2. Your final FPS (or Employer Payment Summary (EPS)) should indicate that it is the ‘Final submission for the tax year’ – and that means for the whole PAYE scheme. Remember that if your scheme covers more than one payroll – for example, a weekly payroll and a monthly one – only indicate on your last FPS submission that it is the final submission, when all the FPSs for the tax year for all other payrolls have been successfully submitted
  3. You can submit an EPS final submission if:

– you forget to tell HMRC on an FPS that it is your final submission

– you didn’t pay anyone in the final pay period of the year

– you sent your final submission early and you then didn’t pay anyone for one or more full tax months for the rest of the tax year

  1. Remember that, on the final submission, you now have a choice whether to complete the end of year questions and declaration (dependent upon your software package). However, if your package requires you to do so – or you choose to complete them anyway – please complete them accurately
  2. Don’t forget it’s important that you keep your PAYE records after you make your final report, in case you need to amend a submission and for compliance purposes.

When you send HMRC your final RTI submission for the year, they’ll have all the information they need

However if you need to correct any of the information on your final submission, send a revised FPS as soon as possible – but definitely before 20 April 2015. This is because, from that date, HMRC will start using the FPS information they hold to work out employee’s Tax, National Insurance, Student Loans and Tax Credits. You should also indicate again that this is your final submission for the tax year. If you discover any errors in your final FPS on or after 20 April 2015, you must correct these by sending an Earlier Year Update (EYU) – trying to submit a FPS on or after this date may trigger an error message from your software.

Remember that if you do need to send an EYU, it should report only the difference between what you originally reported and the correct amount for the tax year. For example, if a figure previously reported as £1,900 should have been £2,300, the EYU should show ‘£400’ – not £2,300. Similarly, if you want to reduce a figure previously reported as, say, £1,000 to £700, the EYU should report ‘-£300’ – with a minus sign in front – not £700. Further guidance on correcting payroll errors

  1. If you are using HMRC’s Basic PAYE Tools to send an EYU, user guides are available
  2. You have until 31 May 2015 to give a P60 End of Year Certificate to any employees employed by you at 5 April – and remember that this can be an electronic copy rather than on paper. Further guidance is available on GOV.UK.

Courtesy of HMRC

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