The payroll year end is a critical time for any UK business. It's the annual process of closing out your payroll records for the tax year, sending the final reports to HMRC, and giving every employee their P60. It all wraps up on the 5th of April, making sure every last penny of tax and National Insurance is accounted for.
Your Strategic Guide to Payroll Year End
Let's be honest, the end of the tax year can feel daunting. But it really doesn't have to be a mad scramble. With a solid plan, you can get through the UK payroll year end without the usual stress, turning what feels like a chore into a smooth, controlled process. It’s all about knowing what to do and when.
This guide is designed to cut through the jargon and give you a clear path forward. We'll walk through everything from running your final payroll to getting P60s out the door and handling those tricky P11D forms for benefits. For any growing business, getting this right is non-negotiable; you're juggling tight HMRC deadlines with the need to keep things running efficiently. We'll lay out the key deadlines and show you how having a modern, joined-up HR system can make all the difference. To get a feel for the basics, you can check out our article on the process of payroll.
Key Milestones for a Smooth Close
A successful year-end close isn't a single event; it's a series of well-planned steps. If you leave it all to the last minute, you're just inviting errors and risking penalties from HMRC. Nobody wants that.
Here are the main things you need to get on your radar:
- Final Payroll Processing: This is it—the last pay run before the 5th of April. Every payslip, deduction, and statutory payment for the year needs to be spot-on.
- HMRC Reporting: You must send your final Full Payment Submission (FPS) to HMRC on or before your last payday. Don't forget the Employer Payment Summary (EPS) if you need to reclaim any statutory payments.
- Employee Documentation: Every single person on your payroll on the 5th of April needs a P60. You've got until 31st May to get these to them.
- Benefits and Expenses Reporting: Got benefits in kind? You'll need to gather all that data for the P11D and P11D(b) forms, which are due to HMRC by 6th July.
To help you keep track, here's a quick rundown of the essential dates and tasks.
Key Payroll Year End Deadlines and Requirements
| Task | Key Deadline | Purpose |
|---|---|---|
| Final FPS/EPS Submission | On or before the final payday (before 5th April) | To report the final payroll figures for the tax year to HMRC. |
| Provide P60s to Employees | By 31st May | To give each employee a summary of their total pay and deductions for the year. |
| P11D & P11D(b) Submission | By 6th July | To report any taxable benefits and expenses provided to employees and directors. |
| Pay Class 1A NICs | By 22nd July (if paying electronically) | To pay the National Insurance contributions due on the benefits reported on the P11D(b). |
Think of these deadlines as your guideposts for the next few months, helping you stay on track and avoid any last-minute surprises.
The secret to a stress-free payroll year end is to stop thinking of it as a single task on the 5th of April. Treat it like a project that starts weeks, or even months, beforehand. This gives you breathing room to clean up data, run checks, and sort out any oddities before they become real problems.
This is where modern systems really shine, turning a compliance headache into a much more manageable part of your business rhythm. For example, a solution like Hubdrive’s HR Management for Microsoft Dynamics 365, which we specialise in implementing, is built to automate many of these steps. This is the big-picture plan, proving that a smooth year-end is well within your grasp with the right tools and a bit of forward planning.
We are DynamicsHub.co.uk. Experience HR transformation built around your business. Hubdrive’s HR Management for Microsoft Dynamics 365 is the premier hire‑to‑retire solution—more powerful, more flexible, and more future‑ready than Microsoft Dynamics 365 HR.
Ready to achieve a seamless payroll year end? Phone 01522 508096 today, or send us a message.
Your Essential UK Payroll Year End Checklist
Let’s move from high-level strategy to the practical, hands-on tasks that make or break a smooth payroll year-end. This is your detailed checklist, designed to guide you through the nitty-gritty, from tidying up employee data to confidently hitting ‘send’ on your final HMRC reports.
The absolute last time you want to be finding data discrepancies is at the end of the tax year. Before you even think about processing that final pay run, you need to conduct a thorough data audit. This simple housekeeping prevents minor errors from spiralling into major compliance headaches down the line. It’s all about making sure the information you hold perfectly mirrors what HMRC is expecting.
A successful payroll year end is always built on a foundation of clean, accurate data. That means meticulously checking the details for every single person on your payroll.
Validating Employee and Company Data
Your first port of call is to verify the core employee information in your system. You’d be surprised how often tiny discrepancies here can lead to rejected submissions or create a real headache for employees when they sort out their own taxes. It’s a foundational step that often gets rushed in the race to meet deadlines.
Pay close attention to these critical data points:
- NI Numbers: Are there any missing or badly formatted National Insurance numbers? An invalid NI number is one of the most common reasons we see for a rejected Real Time Information (RTI) submission.
- Tax Codes: Double-check that the very latest tax codes from HMRC have been applied correctly. Using an old code in the final pay run is a guaranteed way to calculate the wrong tax deductions.
- Personal Details: Confirm that names, addresses, and dates of birth are all accurate, especially for new starters or anyone who’s recently updated their information.
Once you’ve checked your people, take a moment to confirm your company’s details are correct in your payroll software. This includes your PAYE reference number and Accounts Office reference. Consistency across all your submissions is the key to avoiding unnecessary—and time-consuming—queries from HMRC.
Processing Your Final Payroll of the Tax Year
With your data all tidied up, you can move on to processing the final payroll of the tax year with confidence. This is the last payment your employees will receive before the 5th of April deadline, so it needs extra attention. This is the run that finalises all the year-to-date figures that will land on your HMRC reports and employee P60s.
During this process, make sure you’ve correctly handled any recent joiners or leavers.
- Leavers: For anyone who left during this final pay period, you must ensure they’ve been processed correctly and have their P45. Their data is still a crucial part of your final FPS submission.
- Starters: For new hires, check you’ve received and correctly entered their P45 details. If not, make sure a starter checklist has been completed so they’re on the right tax code from day one.
This is also your very last opportunity to make any final adjustments for the year. This could be anything from processing bonus payments and correcting previous errors to accounting for statutory pay like maternity or sick pay. Once this payroll is run and the money is in your employees’ bank accounts, those figures are effectively locked in for the tax year.
A surprisingly common mistake is forgetting to tick the “Final submission for year” box in the payroll software. This tiny oversight signals to HMRC that you still have more reports to send, which can cause no end of confusion and reconciliation problems. Always, always double-check this setting before you submit.
Final HMRC Submissions Under RTI
Once your last payroll is done and dusted, your next priority is getting those final figures over to HMRC via the RTI system. This means sending two key submissions: the Full Payment Submission (FPS) and, if you need to, an Employer Payment Summary (EPS).
Your final FPS has to be sent on or before your employees’ last payday of the tax year. This report is the big one—it contains the complete year-to-date totals for every single employee, detailing their gross pay, income tax, and National Insurance contributions. You could say it’s the most critical report of the entire payroll year end process.
You might also need to send a final EPS by the 19th of April. The EPS is what you use to tell HMRC about things you can’t include on an FPS, like reclaiming statutory maternity pay or reporting your Apprenticeship Levy liability. Critically, you only need to send an EPS if you actually have something to reclaim or report.
Getting these two submissions right is your primary compliance obligation and officially closes the loop on your payroll duties for the tax year.
Issuing P60s and Managing P11D Expenses
Once you’ve successfully closed off the final payroll run of the tax year, your focus shifts from internal number-crunching to some critical external reporting. This part of the process is all about getting the right documents to your employees and letting HMRC know about any taxable benefits you’ve provided throughout the year.
First up, you need to issue a P60 to every single person who was on your payroll on the 5th of April. This isn’t just good practice; it’s a legal requirement, and the deadline is firm: 31st of May. For your team, the P60 is an essential summary of their total pay and all the deductions made. They’ll need it for everything from their personal tax records to applying for a mortgage or claiming tax credits.
The Importance of the P60
You can think of the P60 as an official annual statement of earnings. It’s the definitive proof of the tax an employee has paid on their salary during that tax year.
Thankfully, a modern HR system takes all the pain out of this. A solution built on the Microsoft Dataverse, like the ones we implement, can generate these forms automatically from your finalised payroll data. It can then push them out securely through an employee self-service portal, which gets rid of the cost and security headaches of printing and posting paper copies. Better yet, it creates a perfect audit trail showing exactly when each employee accessed their P60.
Navigating P11D Benefits and Expenses
With the P60s sorted, your attention now has to turn to the often-tricky world of benefits in kind. This is where the P11D form comes in. You use it to report any expenses or benefits given to employees and directors that haven’t already been taxed through your payroll.
The list of what needs reporting is surprisingly broad and can easily trip people up. We’re talking about things like:
- Company cars
- Private medical insurance
- Gym memberships
- Low-interest loans
Each of these benefits has a cash equivalent value that you need to calculate and report to HMRC. Manually pulling all this information together from different departments and spreadsheets is a huge administrative headache. It’s not just time-consuming; it’s also a recipe for errors that can lead to inspections and penalties down the line.
The deadline for submitting P11Ds is the 6th of July. You also have to file a P11D(b) form, which is your summary of the total value of all benefits. This is what you’ll use to work out the Class 1A National Insurance you owe, which must be paid by the 22nd of July.
Handling benefits demands meticulous record-keeping. UK payroll year-end requires careful management of P11D forms for all non-payroll expenses, which are due by 6 July. Missing these deadlines can result in fines of up to £300 per form. With 97% of UK businesses running monthly payroll, the year-end period is already under immense pressure, making accuracy in benefits reporting absolutely critical to avoid underpayment of NICs.
This is where an integrated expense management module becomes invaluable. When your expenses system is baked into your core HR platform, the data you need for P11D reporting is captured as it happens. You can learn more about how expense management software can simplify UK compliance in our dedicated guide.
Imagine employees submitting receipts on a mobile app, with the system automatically flagging them as either a taxable benefit or a standard business expense. This kind of automation dramatically cuts down the manual slog at year-end and massively reduces the risk of something getting missed. For an even smoother P11D process, check out this guide to using a receipt scanner for taxes. By digitising receipts the moment they’re received, you create an instant, searchable record that makes validation a breeze and gives you a rock-solid audit trail for every benefit you report.
Reconciling Data for a Clean Close
A successful payroll year-end isn’t just about hitting deadlines; it’s about making sure every single number is watertight. This is your chance to conduct an internal audit, catching any little gremlins in the system before they snowball into a compliance headache with HMRC.
The core of this process is a thorough check of your payroll records against the payments you’ve actually made to HMRC all year. You need to be certain that the figures you’ve reported through RTI submissions perfectly match the PAYE tax and National Insurance you’ve paid. Even a small discrepancy needs to be tracked down and sorted out.
Aligning Payroll with Finance Records
One of the biggest reconciliation jobs is making sure your payroll data lines up with the company’s finance systems. The general ledger has to be a perfect mirror of your payroll costs—wages, employer NI, pension contributions, the lot. Get this wrong, and you’ll throw your financial reporting out of kilter and create a nightmare for your year-end accounting.
This is where having a single, unified platform really pays off. When your HR and payroll system is part of the same ecosystem as your finance software, like it is with Dynamics 365, the whole reconciliation process becomes dramatically simpler. Data just flows where it needs to go, which means no more manual data dumps into spreadsheets and wrestling with complex formulas that are just begging for a human error to creep in.
Think of it like balancing your personal chequebook, but on a massive scale. If the numbers in your payroll software don’t exactly match your bank statements and what HMRC believes you owe, something’s gone adrift. Finding a £50 variance now is infinitely better than HMRC finding it a year down the line.
For example, the Hubdrive HR Management for Microsoft Dynamics 365 solution we work with is built right on top of the same platform as Microsoft’s finance tools. This native integration means payroll journals can post to the general ledger automatically. Your financial records are always a direct reflection of what’s happening in payroll, no questions asked.
Preparing for the New Tax Year
Closing the books cleanly is as much about looking forward as it is about looking back. As you put the current year to bed, you also have to get your systems ready for the new tax year, which kicks off on the 6th of April. Taking care of this now ensures your first payroll run of the new year is correct right from the start.
This isn’t optional; you absolutely must update your payroll software with all the latest statutory rates and thresholds.
Here’s a quick rundown of what you’ll need to update:
- New Tax Codes: HMRC will be issuing new tax codes for plenty of employees, and your software has to apply them correctly.
- National Insurance Thresholds: The goalposts for both employee and employer NI contributions and earnings thresholds often move.
- Student Loan Rates: The earnings triggers for Plan 1, Plan 2, Plan 4, and Postgraduate loan repayments must be updated.
- Statutory Pay Rates: Double-check that your system has the new weekly rates for statutory sick pay (SSP), maternity pay (SMP), and other family leave.
With the UK payroll year-end, getting annual earnings data spot-on is critical, especially when pay figures are constantly shifting. Recently, the median gross annual pay for tenured full-time employees reached £39,039—a 4.3% jump—while national payrolled employment numbers have been quite volatile. This economic backdrop just highlights why precision is so important in your final HMRC submissions, which are due just after the 5th of April. You can dig deeper into these UK earnings and employment trends on ONS.gov.uk.
Final Checks and Cross-Verification
Before you can finally sign off on the tax year, one last round of checks is vital. This is your final opportunity to cross-verify everything you’ve gathered and reconciled to guarantee its integrity. A great habit to get into is running summary reports from your payroll system and checking them against your FPS submissions from throughout the year.
Zero in on a few key totals:
- Total gross pay for every employee.
- Total income tax (PAYE) you’ve deducted.
- Total employee and employer National Insurance contributions.
- Total student loan deductions.
If all those figures line up perfectly with your HMRC payment records and your general ledger, you can be confident that you’ve achieved a clean close. This methodical approach not only keeps you compliant but also gives you invaluable peace of mind, letting you step into the new tax year on solid, accurate footing.
How Automation Can Take the Sting Out of Year End Compliance
Let’s be honest, running the UK payroll year end with manual processes can feel like you’re trying to solve a complex puzzle in the dark. It’s slow, wide open to mistakes, and frankly, far more stressful than it needs to be. This is exactly where the right technology steps in, transforming a high-stakes compliance scramble into a calm, controlled, and predictable process. Moving away from a labyrinth of spreadsheets is the first step to drastically cutting the risk of human error.
At DynamicsHub, we specialise in implementing and supporting Hubdrive’s HR Management for Microsoft Dynamics 365. It’s the most comprehensive hire-to-retire solution out there, and it’s specifically designed to bring clarity and control back to your year-end procedures. This isn’t just another piece of software; it’s a fundamental change in how you handle HR and payroll, built directly inside the Microsoft ecosystem your team already knows and uses every day.
Integrated Workflows for Unshakeable Accuracy
The real magic happens with its native integration into tools like Dataverse, Microsoft Teams, and Power BI. Instead of grappling with data from different, disconnected systems, every single piece of information lives in one secure, unified place. This creates that elusive “single source of truth” that makes reconciliation and reporting so much easier and more reliable.
Just think about your P60 process being handled by a smart, automated workflow. The system can:
- Check data integrity against your master employee records before anything is generated.
- Automatically create P60s for every eligible employee right after you run your final payroll.
- Distribute the documents securely through an employee self-service portal—no more printing, stuffing envelopes, or worrying about post.
- Log a complete audit trail showing precisely when each employee accessed their document.
This completely removes the time, expense, and security risks tied to printing and posting hundreds of documents, helping you hit that 31 May deadline without breaking a sweat.
Getting a Real-Time Grip on Your Progress
One of the biggest headaches during the payroll year end is simply not knowing where you stand. Are you on track? Are there hidden problems brewing? With Power BI dashboards plugged directly into your HR and payroll data, you get a live, visual overview of your progress. You can watch reconciliation tasks get ticked off, track P60 distribution in real-time, and spot any bottlenecks long before they escalate into serious issues.
Even approvals become a breeze. Forget chasing managers for signatures on reports. Automated notifications can be sent straight to them in Microsoft Teams, letting them review and approve what’s needed with a quick click.
We are DynamicsHub.co.uk. Experience HR transformation built around your business. Hubdrive’s HR Management for Microsoft Dynamics 365 is the premier hire‑to‑retire solution—more powerful, more flexible, and more future‑ready than Microsoft Dynamics 365 HR.
Getting P60 forms out to every employee is a non-negotiable part of the UK payroll year-end. By putting the Microsoft Power Platform to work, automating P60 generation through Dataverse can slash manual errors by up to 90%. With the UK workforce sitting at around 30.4 million, the move to digital delivery is undeniable; printed payslips are quickly becoming a thing of the past. Using modern, GDPR-aligned tools ensures this sensitive data stays securely within your own Microsoft 365 tenant. For a deeper dive into these figures, the ONS provides the latest insights on UK employment from Pay As You Earn Real Time Information.
Understanding how compliance risk management software can protect your business is crucial for a smooth year-end. Embracing automation makes difficult jobs like payroll compliance much more manageable. If you’re interested in the technology that powers these integrations, our guide on what is the Power Platform is a great place to start.
Ultimately, the benefits are clear and tangible: a huge reduction in manual work, a massive boost in accuracy, and a secure, GDPR-compliant process you can actually trust.
To see how we can help you achieve a simpler, more accurate payroll year end, give us a call on 01522 508096 today, or send us a message.
So, What’s the Secret to a Smooth Payroll Year End?
When you boil it all down, getting your payroll year end right isn’t about some secret formula. It really comes down to three things that experienced pros swear by: meticulous preparation, a solid understanding of UK compliance, and having the right tools for the job.
We’ve covered a lot of ground, from the nitty-gritty of running that final payroll and submitting everything to HMRC, right through to issuing P60s and tackling those often-tricky P11D forms. Every single step we’ve discussed is a vital piece of the puzzle, ensuring you stay compliant and close out the tax year without any loose ends.
This is where having a properly integrated HR solution really pays off. A system like the one we’ve built at DynamicsHub automates the most repetitive, time-sapping tasks. It keeps you on the right side of the rules and, just as importantly, frees up your team to focus on work that genuinely pushes the business forward. It’s about taking a process that feels like a chore and turning it into a smooth, well-oiled operation.
Ready to Make This Your Smoothest Year End Yet?
We’re DynamicsHub.co.uk, and we help businesses transform their HR. The engine behind this is Hubdrive’s HR Management for Microsoft Dynamics 365. It’s the complete hire-to-retire solution, giving you more power and flexibility than the standard Microsoft Dynamics 365 HR offering.
It’s time to stop dreading the end of the tax year.
Give our expert team a call today on 01522 508096, or if you prefer, just send us a message and we’ll get right back to you.
Common Questions We Hear at Payroll Year End
Even with the best checklist in the world, the pressure of the UK payroll year end always seems to throw up a few tricky questions. We get it. Here are some of the most common queries we see year after year, with straightforward answers to help you navigate those final hurdles.
What’s the Damage If I Miss the Final FPS Deadline?
Let’s be blunt: missing the final Full Payment Submission (FPS) deadline can get you an automatic penalty from HMRC. The rule is firm – you have to get this report filed on or before your employees’ last payday of the tax year, which always wraps up on 5 April.
If you do slip up, don’t panic, but do act fast. Get that FPS submitted as soon as you realise the error. Your payroll software will have a field where you need to explain why it’s late. HMRC might let a genuine one-off mistake slide, but a pattern of late submissions is a massive red flag that will likely lead to compliance checks and steeper fines.
Someone Left Mid-Year. Do They Still Get a P60?
Nope. The P60 is strictly for employees who are still on your payroll on the very last day of the tax year, 5 April.
Anyone who left before that date should have already walked away with their P45. That’s the document that contains all their final pay and tax information from their time with you. The P60 summarises the full year, which simply isn’t relevant for them.
I’ve Spotted a Mistake, But I’ve Already Sent My Final Submission. Now What?
It happens to the best of us, and thankfully, it’s fixable. If you find a mistake in the tax year you’ve just closed (and you’ve caught it before 19 April), you can simply send an additional Full Payment Submission (FPS) to set the year-to-date figures straight.
For errors discovered in a previous tax year after that cut-off, you’ll need to submit what’s known as a ‘Further Year to Date FPS’. Of course, it’s far less stressful to catch these things during your reconciliation checks before you hit submit. A little extra diligence upfront can save a lot of headaches later.
We are DynamicsHub.co.uk. Experience HR transformation built around your business. Hubdrive’s HR Management for Microsoft Dynamics 365 is the premier hire‑to‑retire solution—more powerful, more flexible, and more future‑ready than Microsoft Dynamics 365 HR.
To start your journey towards a flawless payroll year end, phone 01522 508096 today, or send us a message.
