Preparing for payroll year-end: a checklist

The payroll year end in 2025 is 5 April. Here’s everything you need to do to prepare for it.

Payroll year end ties in with the tax year-end, which is 5 April 2025.

Quick checklist

• Send last FPS to HMRC.
• Report your expenses and benefits.
• Prepare for new tax year and the first payroll run.
• Send P60 forms to your employees.

Sending your Final Full Payment Submission (FPS)

On or before your employees’ payday, you will need to send the HMRC your last Full Payment Submission (FPS) or Employment Payment Summary. This is a record of the year, up to and including 5 April 2025. It must include an indicator that this is your final submission so that HMRC can finalise their records for you and your employees.

You can use your payroll software to send a Full Payment Submission (FPS) to tell HM Revenue and Customs (HMRC) about payments to your employees and what deductions you’ve made.

The actions you will want to take around this are as follows:

• Send your final Full Payment Submission (FPS) on or before your employees’ last payday of the tax year.
• Put ‘Yes’ in the ‘final submission for year’ field in your payroll software.
• Include the end of year information on the last report you submit for that PAYE scheme.
• Include in your payroll all employees you pay in the tax year, no matter how much you pay them.
• Include any employee who has worked for you in the current tax year (since 6th April) even if they’ve left your business.

Please note, if you run more than one payroll under the same PAYE scheme reference (for example for employees you pay weekly and monthly), you’ll need to include the end-of-year information in your last report.

Sending an Employer Payment Summary (EPS)

You should send your final report in an EPS instead of a 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’ field 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.

Get ready for the first payroll run

In order to prepare for your first payroll run you’ll want to:

• Prepare a payroll record.
• Identify the correct tax code to use in the new tax year.
• Enter the correct tax code in your payroll software.

Tax Codes

Please be aware that HMRC will send you:

• P9T form for any employees who need a new tax code.
• P9X form with general changes for employees whose tax code ends in ‘L’.

The L code usually means an employee is entitled to the standard tax-free Personal Allowance.

If you receive a lot of tax code notices you may want to utilise HMRC’S payee desktop viewer. Using this, you can view, search and sort large numbers of employee tax codes and notices.

Preparing Employee P60s

A P60 summarises total pay and deductions for the year.

• You’ll want 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).
• If you’re exempt for completing your payroll online, order your P60s from HMRC.
• If you need to change a P60 give your employee a new P60 marked ‘replacement’ – this can be paper or electronic letter confirming the change.

The deadline for this process is May 31 2025.

Reporting Expenses & P11Ds

At the end of each tax year, you should submit a P11D form to HMRC for each employee you’ve provided with expenses or benefits. So, from 6 April 2025, you must tell HMRC about any expenses and benefits your employees received during 2024 to 2025.

You can report this using your payroll software, if it has this feature.

From the 2023 to 2024 reporting year, HMRC will no longer accept paper P11D and P11D(b) forms including lists. This means that any P11D or P11D(b) for the 2023 – 24 tax year will need to be submitted online through HMRC’s PAYE online service or through using commercial payroll software. Paper forms sent to HMRC on or after 5 April 2025 will be rejected as they will not be in the prescribed format.

Actions you need to take around this are as follows:

• You’ll need to pay any Class 1A National Insurance due on the taxable expenses and benefits you’ve provided.
• Submit a P11D form to HMRC for each employee you’ve provided with expenses or benefits.
• The deadline for this report last year was 6 July 2024.

Note that you do not need to submit any P11D for an employee if you are payrolling all their benefits. You’ll still need to submit a P11D(b) form so you can pay any Class 1A National Insurance you owe.

P11Db Forms

Your P11D(b) tells HMRC how much Class 1A National Insurance you need to pay on all the expenses and benefits you’ve provided.

You’ll also need to submit a P11D(b) form if:

• You’ve submitted any P11D forms.
• You’ve paid employees’ expenses or benefits through your payroll.
• HMRC have asked you to do so.

If HMRC have asked you to submit a P11D(b), you can tell them you do not owe Class 1A National Insurance by completing a declaration.

Checking your payroll software is updated

There are some actions you’ll want to take around this, these include:

• Follow your provider’s instructions to update your payroll software so it uses the latest rates and thresholds for Income Tax, National Insurance and student loan repayments.
• Download and install Basic PAYE Tools again if you’re using a version before 14.2.14330.88. The version number displays in the bottom-left corner of the tool.

It should be noted that Versions 14.2.14330.88 and later of Basic PAYE Tools check for updates automatically, for example when the tax year changes or new rules come in.

If you’re a Moorepay Payroll customer, some of the above may be actioned on your behalf. So, if you’ve got any questions it’s best to speak to your payroll specialist who will be happy to help.

If you’re not a customer and you’d like additional support with your payroll, learn more about our software here.