5 Things You Can Do Today to Make Payroll Year End Easier

Payroll Year End is nearly upon us. This year, the deadline for submitting your Full Payment Submission (FPS) and/or Employer Payment Submission (EPS) is April 19^th, so now it’s time to get your information completed.

After grappling with the cost of doing business challenges, small and medium businesses everywhere will likely find the payroll process is more complex than normal. Don’t worry if you haven’t got the ball rolling yet, there’s still time to gather the information you need. It might feel like a mountain of paperwork, but it doesn’t have to be a struggle. Here are five things you do now to prepare.

1. Get your data in order

It may not feel like there’s that much work to be done, but the process of doing this can quickly snowball once you get started. Getting everything you need in place ahead of the deadline is crucial to preventing stress further down the line and gives you a chance to chase for any details you don’t have, rather than panicking over missing data on the day. A great place to start is making sure you have all employee information such as addresses and tax codes up to date.

2. Ensure your methods align

If your business handles Payroll Year End differently from year to year, it may end up lengthening the process. HMRC will look to see if your methods from the previous year match as part of their search for discrepancies, so making sure you’re using the same approach is key. If not, you might be inadvertently signing yourself up for more paperwork further down the line if you’re asked to double check or prove certain details. To avoid this, check your reports against the HMRC website to make sure they match. If you’re using the same methods this year, you’re all set. If not, figure out what’s changed and do your best to align this year’s payroll documentation to avoid having to file an Earlier Year Update or amended FPS submission.

3. Find out what you need to send

Are you aware of what documents you need to submit this year? It’s time to find out if you need to file an FPS, EPS, or both. You may have only had to submit one or the other last year, so it’s well worth checking again for this year in case things have changed.

An EPS is used to document spending that doesn’t fit into an FPS, including recovery/compensation for statutory payment. Even if you don’t have any special circumstances to report, you still need to file an EPS if none of your employees are going to be paid in the last period before 5^th April.

You don’t have to submit an FPS alongside this if you didn’t pay any employees in the final pay period of the tax year, but otherwise you’ll be required to submit both, which should be possible through your payroll software.

4. Check if you need to pay Apprenticeship Levy

If your business pays its employees over £3 million per year, you need to pay Apprenticeship Levy. This means you’ll need to report this via an EPS, which can also be used to submit the payment. Certain sectors are required to pay Apprenticeship Levy regardless of their pay bill, so franchises, schools, joint ventures, employment or recruitment agencies, managed service companies, short-lived companies, and businesses that conduct off-payroll working will all need to pay this.

5. Write a checklist

You’re not the only one feeling the pressure of this busy period in the financial calendar, so don’t feel bad if you feel overwhelmed. However, it’s important to get on top of your data sooner rather than later. One thing you can do right this minute to ease the pressure is start making a checklist of everything you need to do. You might not have the time to start compiling documents today, but maintaining awareness of what needs to be done is half the fight. You can then reuse this checklist next time Payroll Year End rolls around, updating it in line with any new business activity rather than starting again from scratch.

You’re not alone in this taxing time

With so many complex rules and regulations to get your head around, it’s all too easy to get stuck. There are lots of resources online to help you understand what you need to do for your business, including the government’s own guidance, and solutions that can help make the process easier, so have a look at what’s out there. And if it all gets a bit much, just think how relaxed you’ll feel on the day knowing you did the hard work earlier on!

By Stephanie Coward, IRIS

IRIS will be exhibiting at Accountex London on the 10-11 of May 2023 on stand 1140.

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