Education

How to prepare for the May P60 deadline

13 May 2022

If you're a UK business owner who runs a payroll, you must report to HM Revenue and Customs (HMRC) on the previous tax year, ending 5 April. You also need to provide your employees with a P60 by 31 May at the latest and take several steps to prepare for the tax year ahead. Read on to find out what you need to do.

P60 Hero

HMRC states that you need to "give a P60 to all employees on your payroll who are working for you on the last day of the tax year (5 April)." A P60 document summarises the employee's total pay and deductions for the tax year.

If for whatever reason, you need to change an employee's P60, you can give them a new one marked "replacement" or send them a letter confirming the changes you've made. The deadline to provide employees with their P60 is 31 May. 

Annual payroll and reporting tasks for UK businesses

The P60 deadline isn't the only date to put in your diary regarding payroll.

1. Send your final payroll report of the year

On the final payday of the tax year, you'll need to submit your final Full Payment Submission (FPS). Select "Yes" in the "Final Submission of the year" field in your payroll system if the function is available. 

Suppose you run multiple payrolls under one PAYE scheme reference. You should include the end-of-year data in your final report, and additional forms are required if you claim a National Insurance holiday for new employers. 

Depending on your circumstances, you might be required to send an Employer Payment Summary (EPS) instead of an FPS. According to HMRC, you should submit an FPS if any of the following apply:

  • you forgot to put 'Yes' in the 'Final submission for year' field in your last FPS

  • your software does not have a 'Final Submission for year' area on the FPS

  • you did not pay anyone in the final pay period of the tax year

  • you sent your final FPS early, and you did not pay anyone for one or more full tax months in the last tax year

If you pay workers weekly, fortnightly or four-weekly, you may have to make a "week 53' payment "in your final FPS of the year.

2. Update employee payroll records

You'll need to prepare a payroll record, identify the correct tax code to use in the new tax year and enter this tax code in your payroll software for every staff member working at your company on 6 April. You should include employees who have worked for you in the current tax year, even if they've subsequently left. 

You can use a new employee's P45 to work out their tax code with you. 

HMRC will send a P9T form for employees who need a new tax code and a P9X state with general changes for employees whose tax code ends with an 'L', 'M' or 'N'. You can always use HMRC's PAYE Desktop Viewer for ease if you receive many notices.  

3. Update payroll software

You should also update your payroll software to use the correct parameters for income tax, national insurance and student loan repayments. If you're using a Basic PAYE Tools version that predates 14.2.14330.88, you'll have to re-download and install it. Version 14.2.14330.88 and later ones check for updates automatically.

4. Give employees a P60

You need to give out P60s by 31 May, as we've already started!

5. Report expenses and benefits

You can use your online payroll system to report any expenses and benefits if possible. The deadline for registering these is 6 July. Payment for Class 1A National Insurance due on the taxable costs and benefits you've provided must be received by 22 July - or 19 July if you submit your payment by post. 

For the latest information on payroll reporting, visit the HMRC website.

Does your business require funding this tax year?

Are you looking for some finance to give your business a cash flow boost this tax year? If the Covid pandemic has impacted your business, it might be eligible for finance through the Recovery Loan Scheme (RLS), ending 30 June. No personal guarantees are required for loans of up to £250k.

Get an RLS loan

Aside from the RLS, there are plenty of other business finance options. Whether you're looking to add more staff to your payroll or need finance for new equipment, use Funding Options to see what your business could be eligible for today.

See my funding options

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Editorial Team

Editorial Team

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