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Pegasus Blog

Prosessing your payroll year end under RTI


March 26, 2014

Another year has flown by and it’s almost time to run your Payroll Year End for the 2013/2014 tax year. However, this year there’s a difference. The introduction of Real Time Information (RTI) in 2013 brought with it changes to the way employers run their Payroll Year End. From this year, all employers will need to run their Payroll Year End under the new format.

What’s new?

In previous years, you’ll be familiar with sending P14s for every employee you paid during the tax year. P14s tell HMRC how much tax and National Insurance each employee has paid. However, since RTI was introduced, you’ve been telling HMRC those figures at every pay period so you no longer need to send HMRC P14s and P35s during your year end process.

Under RTI, the 2013/2014 tax year should be a much simpler process. There are a number of key tasks to complete to ensure things run smoothly. Let’s go over them:

Sending your final submission for the tax year

You should submit your final FPS on/before the date you pay your employees. For example, if your last pay day of the tax year is 28 March, then you’ll need to submit your final FPS on/before 28 March. You’ll also need to submit an EPS, as applicable and don’t forget to submit your ‘End of Year Questions and Declarations’ via your final FPS or EPS.

Correcting payroll information

Normally if you notice errors after you’ve submitted your FPS, you would correct them by re-submitting the FPS or waiting until the next one is due. However, correcting errors this way after the tax year end is restricted.After you submit your FPS for the 2013/2014 year end, you only have until 19 April to re-submit your FPS with the corrected figures. From 20 April, you’ll have to send an Earlier Year Update (EYU) if you need to amend any errors.

Issuing P60s

You’ll still need to give all employees a P60 outlining their total pay and deductions during the 2013/2014 tax year. The deadline for issuing P60s is 31 May.

Submitting P11Ds

Any benefits and/or expenses paid to an employee are highlighted on a P11D. You must tell HMRC how much you have given an employee in benefits and/or expenses by submitting a P11D for every employee by 6 July.

Tips for a successful Payroll Year End

It’s important to note that now you submit information to HMRC in real time, the information you enter on your payroll is automatically sent to HMRC. Therefore, it’s vital that the information you submit is correct otherwise HMRC could issue incorrect tax codes to your employees.

Make sure your employee personal information is consistent on any submission to HMRC. If your payroll data differs to the information held by HMRC, it can create duplicate employment records. Duplicate records can affect an employee’s tax code and deductions such as student loan repayments and National Insurance.

Re-employing ex-employees - if you re-employ ex-employees during the same tax year, avoid headaches by treating them as a new employee. That means giving the employee a new payroll ID for example.

For other advice on submitting your Payroll Year End under RTI, take a look at HMRC’s official guidance material.