As the tax year draws to a close, business owners must ensure their payroll is accurate, compliant, and up to date. From processing bonuses to issuing P60s, there are several key tasks to complete before April. Here, we’ll break down everything you need to do to prepare for the payroll year-end.

1. Have You Processed Any Year-End Bonuses?

If you’re considering rewarding your employees with a bonus, now is the time to finalise your decision. Bonuses must be processed through payroll and will be subject to tax and National Insurance. You’ll need to:

• Consider whether delaying payment until the next tax year might be more beneficial
• Ensure the bonus is accounted for correctly in payroll
• Communicate with employees about the net amount they will receive

2. Understand Net vs. Gross Pay

Many payroll mistakes come down to confusion between gross and net pay:

• Gross Pay is the total salary before deductions
• Net Pay is what employees take home after tax and National Insurance

Making errors in payroll calculations can result in underpayments or overpayments, leading to compliance issues. Reviewing your payroll structure now can help avoid discrepancies.

3. Issuing P60s to Employees

A P60 is an end-of-year tax summary that must be provided to all employees who were on payroll at the end of the tax year. Employers are legally required to issue P60s by 31st May, so it’s crucial to start preparing them early.

4. Should You Be Filing P11Ds?

P11Ds report benefits in kind, such as company cars, health insurance, or reimbursed expenses. If you provide these benefits, you may need to submit a P11D form to HMRC by 6th July. Ensuring these are filed correctly can help prevent fines and compliance issues.

5. Review Payroll Software and Processes

Payroll is one of the most important aspects of running a business, and using modern payroll software will help streamline the process. Consider whether your current system:

• Accurately calculates tax and National Insurance.
• Generates payslips and reports efficiently.
• Helps you stay compliant with payroll regulations.

If you’re unsure whether your current payroll system is up to the task, now is the perfect time to explore better solutions or consider outsourcing the task.

With the tax year-end fast approaching, taking a proactive approach to payroll can save time, money, and hassle. If you need guidance on payroll compliance, P60s, or P11Ds, we’re here to help. Get in touch with us to ensure a smooth transition into the new tax year.