Understanding the PAYE Year End: What Employers Need to Know
Understanding the PAYE Year End: What Employers Need to Know
The PAYE (Pay As You Earn) year end is a key milestone in the UK payroll calendar. Taking place at the close of each tax year on 5 April, it marks the point at which employers must finalise payroll records, report accurate figures to HM Revenue & Customs (HMRC), and provide employees with essential year end documents. Getting this process right is critical for compliance, employee confidence, and a smooth start to the new tax year.
Keren Black from ARAG Law answers some key questions.
What is the PAYE Year End?
The PAYE year end refers specifically to the end of the UK tax year, which runs from 6 April to 5 April. Unlike a company’s financial year end, this date is fixed nationally and applies to all employers operating PAYE schemes. At year end, employers must ensure that all pay, tax, and National Insurance information for the year has been correctly reported to HMRC under the Real Time Information (RTI) system.
Key Employer Responsibilities at PAYE Year End
Employers are required to complete several mandatory tasks as the tax year closes:
Submitting the final payroll report
The final Full Payment Submission (FPS) of the tax year must be sent to HMRC on or before the employee’s last payday before 5 April. This submission must be marked as the final one for the year so HMRC knows no further payments will be made in that tax year. In some cases, an Employer Payment Summary (EPS) is also required to report adjustments, such as statutory payments or Employment Allowance claims.
Issuing P60s to employees
Every employee who is on the payroll on 5 April must receive a P60 by 31 May. The P60 is an end of year certificate showing total pay, Income Tax, and National Insurance contributions for the year. Employees rely on this document for personal tax checks, mortgage applications, and benefit claims.
Reporting expenses and benefits
If employees or directors received taxable benefits or expenses that were not payrolled, employers must submit P11D and P11D(b) forms by 6 July following the end of the tax year. Any Class 1A National Insurance due on these benefits must then be paid by 19 or 22 July, depending on payment method.
Important PAYE Year End Deadlines at a Glance
• 5 April – Tax year ends
• On or before last payday – Final FPS submitted to HMRC
• 19 April – Deadline for final EPS (if required)
• 31 May – P60s issued to employees
• 6 July – P11D and P11D(b) submissions due
• 19/22 July – Class 1A National Insurance payment due
These deadlines are set by HMRC and missing them can result in automatic penalties.
Preparing for the New Tax Year
Once year end reporting is complete, employers must prepare payroll systems for the new tax year starting 6 April. This includes updating payroll software, applying new tax codes and National Insurance thresholds, and ensuring employee records are accurate and up to date. HMRC advises employers to make these updates from 6 April, or earlier if required by their payroll provider.
Why the PAYE Year End Matters
Accurate PAYE year end processing ensures that HMRC records match employer records, reducing the risk of tax discrepancies for employees. It also helps HMRC carry out its post year end reconciliation process, where they check whether individuals have paid the correct amount of tax. Errors or late submissions can lead to penalties for employers and unexpected tax bills or refunds for employees.
Final Thoughts
The PAYE year end is more than an administrative exercise – it is a vital compliance process that underpins the UK tax system. By understanding the key responsibilities, meeting deadlines, and preparing early, employers can complete year end payroll confidently and start the new tax year on the right footing.