An Employer Payroll Checklist – Things To Check

With the end of the tax year sweeping us by, it’s more important than ever to make sure your financial and tax affairs are in order. The previous year has seen businesses struggle with the severity of the pandemic and lockdown periods, which has no doubt caused disruptions both professionally and personally.

Whilst the government have introduced multiple incentive schemes, grants and loans due to the major uncertainty caused by COVID-19, the national deficit is at a monumental peacetime high. The Office for Budget Responsibility (OBR) forecasted that the deficit is around £355 billion in 2020/21, this is made up of support to public services (£106 billion), households (£82 billion) and businesses (£62 billion. As a result of this, government services are likely to try and reclaim as much money as possible in order to reduce the budget deficit and boost the economy.

It’s always recommended as a business, to ensure all employer annual returns are in working order and running smoothly to avoid any penalties from HMRC. Here’s some things to consider as the deadline for filing your 2020/2021 end of year accounts is on Monday 19th April 2021:

What Is PAYE and National Insurance?

Whilst many assume making sure as an employer you are set up on Pay As You Earn (PAYE) and therefore providing National Insurance contributions for all employees, there are still many businesses who choose to avoid this. This is done illegitimately, most commonly through undeclared cash in hand payment processes, which breaks the code of the Employment Rights Act 1996 and also avoids vital tax contributions to the state which is highly illegal.

PAYE is a process set in place by HMRC ensuring that the correct amount of income tax is deducted from each employee. This is calculated based on how much an employee earns and whether they are eligible for the personal allowance, which stands at £12,570 for the 2021/2022 tax year (up from £12,500 for the 2020/2021 tax year). Anything exceeding the tax-free personal allowance, an employer will be charged either 20%, 40% or 45% depending on their salary. The full breakdown of income tax bands depending on your income can be found here.

National Insurance (NI) is a tax on your earnings or self-employed profits. These are paid to the state which are then distributed in the form of state benefits such as for unemployment, statutory sick pay or maternity leave. A breakdown of NI rates can be found here.

If you’re a contractor, sole trader or freelancer, income tax and national insurance can be paid through Self-Assessment Returns where individuals submit a self-assessment tax return once or twice annually. PAYE for businesses is processed through Real Time information (RTI) meaning every time you pay your employee’s wages, the information is to be sent to HMRC. If, as a business, you’re using most online payroll software such as Xero, then through RTI, it will automatically deduct any income tax and national insurance contributions owed.

It’s also worth noting when your business’s payroll ends and whether you have a week 53. If you pay employee’s wages monthly, then this isn’t needed as PAYE will calculate your payroll ending on week 52 of the year automatically. If you choose to pay employees through weekly, fortnightly or four weekly payments and your normal pay date falls on the 5th April (end of the tax year), then you do have a week 53. If this is the case, all that is needed is to simply complete your payroll for 5 April in the usual way before submitting your year end accounts.

Have There Been Any Departures From Your Business?

This is particularly relevant due to the unpredictable year which we’ve all experienced. If your business has had any leavers or you’ve had to let any employees go, these will need to be processed, whilst providing the departing employee with a P45. This can be easily done through your payroll software and will calculate any outstanding payments correctly.

This is vital before submitting your business’s Full Payment Submission (FPS) and Employer Payment Summary (EPS). 

Filing Your Year End Accounts, Full Payment Submission (FPS), Employer Payment Summary & Supplying P60s

Full Payment Submission (FPS) is the process of submitting your company, employee and employee payment details to HMRC each time you pay your employees. The FPS consists of:

  • Starter and leaver information
  • Employee information such as name, address, National Insurance number and tax code
  • Employee payment and deduction information
  • Income Tax, National Insurance and student loan contributions 

If you choose to submit the FPS after the day  or later from when you’ve paid your employees, HMRC will demand a legitimate reason for this and if not found, will likely incur a penalty charge.

An Employer Payment Summary (EPS) is the process of reporting values to HMRC that you can’t include on the Full Payment Submission (FPS). These include:

  • Reclaiming statutory maternity, paternity, adoption, parental bereavement or shared parental payments – even if you received an advance payment from HM Revenue and Customs (HMRC) to cover them.
  • Claiming the Employment Allowance – do this once each tax year.
  • Reclaiming Construction Industry Scheme (CIS) deductions as a limited company.
  • Claiming National Insurance contributions holiday for previous tax years.
  • Paying the Apprenticeship Levy if you, or employers you’re connected to, have an annual pay bill exceeds £3million.

These values affect the payments you make to HMRC on a monthly or quarterly basis. If you’ve not paid any employees for a particular tax month, then an EPS is to be submitted instead of an FPS. EPS will be automatically submitted by online payroll software, or alternatively can be inputted using HMRC’s Basic PAYE Tools portal system and must be submitted by 19th of the following tax month for HMRC to apply any reduction.

On your payroll software, ensure the processing date is set for the 5th April, which is when the tax year ends. This will then allow you to submit your end of year tax returns.

Once all this is complete, you will then need to provide all of your employees with their annual P60 form by the 31st May 2021. A P60 outlines all money that has been paid over the tax year, along with all the tax and National Insurance Contributions (NICs) that have been deducted. This is very similar to the information supplied in a P45 form, however P60s are given to current employees, whilst staff that are leaving the company are provided with a P45.

We hope this has provided you with the basic information in regard to employer payroll. If you require any more information on payroll or anything accounting related for that matter, please don’t hesitate to get in contact with us at Nordens where one of our trusted advisors would be happy talking you through your query.

Related News & Insights

19 November 2024

How Advisory Can Help Navigate Uncertainty

Steven Brewer

15 November 2024

Cryptocurrency & Inflation: A Guide For Businesses

Nordens Partner

15 November 2024

The Power of Networking for Business Growth

Joe Sword

13 November 2024

Capital Gains Tax Update: What It Actually Means

Adam Truluck

30 October 2024

EIS And SEIS: Here To Stay

Adam Truluck

16 October 2024

Companies House Updates: The Latest

Jennifer Georgiou

09 October 2024

Recruitment Industry Round-up: September 2024

Ashlee Cooper

09 October 2024

Technology Round Up: September 2024

Nordens Partner

09 October 2024

Property & Construction Round-up: September 2024

Ashlee Cooper

09 October 2024

Professional Services Round Up: September 2024

Nordens Partner

03 September 2024

Finance, Scale, Exit: Recruitment Industry Panel

Adam Truluck

10 July 2024

FAQ: How do VAT late payment penalties work?

Maria Mousoullou

08 July 2024

Invoice Finance - All You Need To Know

Darren Hahn

19 June 2024

Reverse Charge VAT: What you NEED to know

Maria Mousoullou

07 June 2024

FAQ – Does my business need an audit?

Lorraine Curtis

03 June 2024

Company Car Tax: What you need to know

Nordens Partner

12 April 2024

Understanding a Shareholders' Agreement

Jennifer Georgiou

01 April 2024

EV Salary Sacrifice Scheme – A Gamechanger

Steven Brewer

04 March 2024

How Target Darts is Revolutionising the Game

Ashlee Cooper

19 February 2024

Why there is a tax on neurodiverse people?

Ashlee Cooper

12 February 2024

IR35 reforms continue to frustrate freelancers.

Adam Truluck

02 February 2024

A Comprehensive Guide to Registering an Overseas Entity

Jennifer Georgiou

01 February 2024

Decoding The Changes To UK's New Company Law

Jennifer Georgiou

29 January 2024

Business Success Series: Mindset

Joe Sword

10 January 2024

Unveiling the winners of our 2023 End-of-Year Awards

Panayiota Viglas

20 December 2023

Rebel: 30 Years Of London Fashion

Mark Norden

08 December 2023

Setting up a Limited company as a Freelancer

Nordens Partner

05 December 2023

Official Diagnosis: Imposter Syndrome

Ashlee Cooper

29 November 2023

Finalists: Culture Pioneers Award 2023

Mitch Hahn

16 November 2023

Save more as a couple with the Marriage Allowance

Adrian Williams

09 November 2023

The Autumn Statement – What to Expect?

Adam Truluck

01 November 2023

Weathering the SME Insolvency Storm in the UK

Mitch Hahn

30 October 2023

Is Financial Management Key for Law Firm Expansion?

Panayiota Viglas

27 October 2023

Tailoring Management Accounts for Law Firms

Panayiota Viglas

23 October 2023

Ensuring Solicitor Firm Success in SRA Audits

Lorraine Curtis

20 October 2023

The Benefits of Outsourcing to an Accountancy Firm

Nordens Partner

16 October 2023

Why Do Legal Pros Need Strategic Tax Planning?

Adam Truluck

26 September 2023

Should Capital Gains Be Aligned With Income Tax?

Adam Truluck

19 September 2023

How Advisory Can Help Turn Your Business Greener

Steven Brewer

11 August 2023

Lewis & Co Join Nordens

Mitch Hahn

26 July 2023

How AI Can Transform Your Business

Mitch Hahn

25 May 2023

How To Succession Plan In Your Business

Nordens Partner

12 May 2023

An Insight Into Selling Your Business

Nordens Partner

27 April 2023

5 Ways How Businesses Can Improve Their Cashflow

Nordens Partner

06 April 2023

What Are The Changes To Pensions In 2023?

Adam Truluck

22 March 2023

Director’s Loan Accounts – What Are They?

Nordens Partner

15 March 2023

The Spring Budget 2023 In A Nutshell

Adam Truluck

24 February 2023

The Benefits Of On The Go Bookkeeping

Balraj Bajwa

10 February 2023

Influence Your Accounting With Stevo The Madman

Nordens Partner

31 January 2023

The CIS & Handing Over Responsibilities

Stacey Carr

27 January 2023

The 5 Benefits Of Outsourcing An Accountant

Mitch Hahn

23 January 2023

Influence Your Accounting With Victoria Winterford

Nordens Partner

07 December 2022

The New VAT Penalty System – All You Need To Know

Maria Mousoullou

05 December 2022

The Importance Of Filing A Confirmation Statement

Nordens Partner

28 November 2022

The Super-Deduction Scheme - Ending On 31st March 2023

Panayiota Viglas

28 November 2022

Tax Scams – How To Identify & Report Them

Adam Truluck

17 November 2022

The Autumn Budget 2022 Recap

Adam Truluck

02 November 2022

Lorraine Curtis on The Challenges Facing Auditing

Lorraine Curtis

26 October 2022

How Will The New PM Rishi Sunak Affect You?

Mitch Hahn

20 October 2022

Renewable Energy – Is It The Solution?

Steven Brewer

14 October 2022

Another U-Turn - Corporation Tax

Adam Truluck

05 October 2022

Making Tax Digital Is Changing Again

Adam Truluck

29 September 2022

Changes to IR35 & Off Payroll Working

Adam Truluck

27 September 2022

The EIS & SEIS Process – A Case Study

Adam Truluck

23 September 2022

The Mini-Budget in a Nutshell

Mitch Hahn

08 September 2022

The New Register Of Overseas Entities – What Is It?

Nordens Partner

07 September 2022

The Next Prime Minister – What To Expect?

Mitch Hahn

06 September 2022

Virtual FD Boosts Businesses - Case Study

Hollie Watson

01 September 2022

CGT Changes For Divorcing Couples

Adam Truluck

18 August 2022

Nordens Spotlight - Every Child Online

Nordens Partner

05 August 2022

13% Inflation & Increased Interest Rates

Mitch Hahn

27 July 2022

The Commonwealth Games - Nordens Joins In

Nordens Partner

19 July 2022

The Great Resignation's Lasting Impact

Nordens Partner

04 July 2022

Branching Out – How Franchises Work

Nordens Partner

29 June 2022

How To Register Your Business as a Company

Nordens Partner

20 June 2022

Streamlining Your Outgoings - Payment Runs

Hollie Watson

10 June 2022

A Message From Our CEO, Mitch Hahn

Mitch Hahn

27 May 2022

Have You Seen Our New Website?

Nordens Partner

25 May 2022

Financial Support For The Elderly

Paula Webb

18 May 2022

Business Credit Rating Score

Nordens Partner

26 April 2022

The Importance Of Pricing Structures & Delegation

Panayiota Viglas

28 February 2022

Back To Normality? – All You Need To Know

Mitch Hahn

18 February 2022

Why LCE Audits Are So Important For Businesses?

Lorraine Curtis

07 February 2022

The Future Of Insolvency

Joe Sword

14 December 2021

Securing Funding To Grow Your Business

Nordens Partner

02 December 2021

What Grants Are Available For My Business?

Darren Hahn

01 December 2021

Friends Of Essex & London Homeless Charity

Mitch Hahn

19 November 2021

5 Areas Of The Construction Industry To Improve

Hollie Watson

19 November 2021

The Construction Industry Scheme (CIS)

Mitch Hahn

12 November 2021

Stepping Away From Your Business?

Joe Sword

08 November 2021

The Recovery Loan Scheme & Another Extension

Darren Hahn

05 November 2021

The Future Of SMEs – We Want To Know!

Mitch Hahn

28 October 2021

Cryptocurrency and How To Account For It

Nordens Partner

21 October 2021

Elliott Winner: How Brexit Is Affecting Service

Nordens Partner

20 October 2021

Joe Sword: How To Navigate An Unstable Economy

Nordens Partner

13 October 2021

The Autumn 2021 Budget Predictions

Adam Truluck

12 October 2021

The Global Minimum Corporate Tax Rate

Adam Truluck

08 October 2021

Making Tax Digital - All You Need To Know

Adam Truluck

29 September 2021

Furlough and What Needs To Be Considered

Joe Sword

29 September 2021

How The Fuel Crisis Could Affect Your Business

Adam Truluck

24 September 2021

What Makes A Good and Dependable Leader?

Joe Sword

10 September 2021

Are You A Fashion Entrepreneur In The Making?

Nordens Partner

09 September 2021

When Is The Best Time To Recruit For Your Business?

Sharon Brooks

06 September 2021

The New VAT Rate For Hospitality Businesses

Maria Mousoullou

03 September 2021

Why Protecting Your Business Is As Important As Ever

Nordens Partner

25 August 2021

Benefits of a Virtual Finance Director (VFD)

Nordens Partner

06 August 2021

Impacts of Furlough Ending

Hayley Mason

05 August 2021

Planning For Your Children’s Future

Nordens Partner

04 August 2021

Benefits of the Research & Development Relief

Adam Truluck

19 July 2021

The Importance of Business Insurance

Darren Hahn

01 July 2021

A Year On: The Furlough Scheme

Hayley Mason

28 June 2021

Understanding the EU Settlement Scheme

Darren Hahn

25 June 2021

How to Structure For Growth

Joe Sword

25 June 2021

The Tax-Free Childcare Scheme

Adam Truluck

17 June 2021

Investment Schemes For Start-ups

Joe Sword

16 June 2021

A Year On: The CBILS & Repayments

Darren Hahn

10 June 2021

The High-Income Child Benefit Tax Charge

Adam Truluck

24 May 2021

The Help To Grow: Management Scheme

Darren Hahn

14 May 2021

The Third Step Out Of Lockdown

Mitch Hahn

06 May 2021

Articles Of Association: How To Submit

Nordens Partner

27 April 2021

The Introduction of The Fourth SEISS Grant

Darren Hahn

22 January 2021

Brexit - What To Expect For Businesses

Mitch Hahn

21 December 2020

New Year, New Business Goals

Mitch Hahn

11 December 2020

VAT Brexit Changes - All You Need To Know

Adam Truluck

08 December 2020

Deferring Tax Due in January

Adam Truluck

08 December 2020

Nudging To Correct Your Tax Return

Adam Truluck

01 December 2020

Tax Crunch Expected In 2021 - What Will Happen?

Adam Truluck

06 November 2020

Another Furlough Extension Until March 2021

Sharon Brooks

02 November 2020

Extended Furlough And All Government Updates

Darren Hahn

23 October 2020

Latest Government Updates

Darren Hahn

16 October 2020

Working From Home Could Land You A Tax Bill

Adam Truluck

13 October 2020

Government Announces New Support Measures

Darren Hahn

09 October 2020

Don't Miss Out On Tax Relief Allowances

Adam Truluck

06 October 2020

The Importance Of Taking A Break

Mitch Hahn

25 September 2020

Chancellor's Winter Economy Plan

Darren Hahn

22 September 2020

Make Sure Your Business Is Ready

Joe Sword

15 September 2020

IR35 Preparation

Adam Truluck

08 September 2020

What Is My Business Worth? Valuing Your Business

Darren Hahn

02 September 2020

Recession Proof Your Business

Darren Hahn

20 August 2020

CBILS Extension

Darren Hahn

18 August 2020

Second Self Employed Grant Claims NOW LIVE

Adam Truluck

14 August 2020

Job Retention Scheme Bonus

Adam Truluck

05 August 2020

What is New With Furlough?

Sharon Brooks

31 July 2020

Save Your Business From Failure

Darren Hahn

24 July 2020

Free Receipt Bank For All

Adam Truluck

23 June 2020

An Introduction To Nordens HR

Sharon Brooks

16 June 2020

LATEST Furlough Changes

Hayley Mason

04 May 2020

Bounce Back Loan

Darren Hahn

16 April 2020

Furlough At Our Cost And Update From HMRC

Darren Hahn

03 April 2020

Emergency Business Loan Scheme Revamped

Darren Hahn

02 April 2020

Job Retention Scheme (Furlough)

Hayley Mason

31 March 2020

Self Assessment Tax Payments 2019/20

Adam Truluck

03 March 2020

Budget Predictions 2020. Are You Ready?

Adam Truluck

25 February 2020

Accounting2You - An Introduction

Hollie Watson

18 February 2020

Corporate International: Global Awards 2020

Olga Wilson

12 February 2020

IR35 Changes - The Complete Guide

Adam Truluck

04 February 2020

What Is Payroll? Get The Full Details (2020)

Hayley Mason

06 January 2020

20 ways to save tax in the ‘20s

Adam Truluck

19 December 2019

Raising funds for our Charity of the Year

Mitch Hahn

09 December 2019

8 ways to finance your business

Darren Hahn

29 October 2019

Nordens' first annual conference

Nordens Partner

14 October 2019

How to quadruple your business’ worth

Darren Hahn

27 September 2019

How we saved one company 43 days a year!

Darren Hahn

21 September 2019

Get ready for changes to the IR35 rules

Adam Truluck

30 August 2019

How to smooth a turbulent cashflow

Darren Hahn

26 August 2019

Find A Business Mentor

Joe Sword

26 August 2019

The Business Coaching Process

Joe Sword

22 August 2019

What does a business coach do?

Joe Sword

22 August 2019

What is business coaching?

Joe Sword

17 August 2019

Can you claim the employment allowance?

Adam Truluck

28 June 2019

Two more awards up for grabs

Mitch Hahn

13 June 2019

Refer a friend and earn up to £1000!

Mitch Hahn

28 May 2019

Some common issues with VAT registration

Nordens Partner

28 May 2019

Brexit - Why Britain has never had it so good

Nordens Partner

28 May 2019

Brand new look and feel for Nordens!

Mitch Hahn

28 May 2019

VAT, Brexit and where you'll stand

Adam Truluck

28 May 2019

Don't get struck off by Companies House

Olga Wilson

28 May 2019

Business by Design

Darren Hahn

28 May 2019

Maximise value before sale

Joe Sword

28 May 2019

Hire For Culture, Train For Skills

Sharon Brooks

28 May 2019

Autumn Budget - Tax Briefing

Adam Truluck

28 May 2019

VAT, Making Tax Digital (MTD) and fraud

Adam Truluck

28 May 2019

Give Your Business Direction

Olga Wilson

28 May 2019

Importance of Marketing

Nordens Partner

28 May 2019

Plan For Future Business Success

Darren Hahn

28 May 2019

VAT risks associated with family trading

Adam Truluck

28 May 2019

Congratulations to James Fowler ACA

Mitch Hahn

28 May 2019

Successful Dragons' Den Candidates

Mitch Hahn

28 May 2019

The New Finance Bill

Adam Truluck

28 May 2019

Mentoring for business growth

Paula Webb

28 May 2019

With the best of intentions…

Mitch Hahn

28 May 2019

Congratulations to Selen Mertdjan ACCA

Panayiota Viglas

28 May 2019

Why you need a partnership agreement

Paula Webb

28 May 2019

Tax refunds: HMRC policy changes

Adam Truluck

28 May 2019

Why we love our super-smart telephone system

Nordens Partner

28 May 2019

Let Property Disclosure

Adam Truluck

28 May 2019

Are you a visionary or a two-percenter?

Darren Hahn

28 May 2019

Business forecasting: how can it help?

Darren Hahn

28 May 2019

Tax help for older people

Adam Truluck

28 May 2019

Business Factor update!

Mitch Hahn

28 May 2019

Mentoring For Growth

Joe Sword

28 May 2019

The Power of the Team Survey

Darren Hahn

28 May 2019

The three categories of succession planning

Nordens Partner

28 May 2019

New Registered Audit division for Nordens

Lorraine Curtis

28 May 2019

We're on our way to raising £10k for charity

Nordens Partner

28 May 2019

Don't get caught out by scam texts

Nordens Partner

28 May 2019

Visit us at the Restaurant Show!

Nordens Partner

28 May 2019

Are you suffering from neophobia?

Nordens Partner

28 May 2019

What does the Audit Team do?

Lorraine Curtis

28 May 2019

The 2018 Accounting Excellence Awards

Nordens Partner

28 May 2019

Team motivation and celebration

Nordens Partner

28 May 2019

For anyone who has a student loan...

Nordens Partner

28 May 2019

Budget highlights

Nordens Partner

28 May 2019

Tis the season to be jolly don’t you know

Nordens Partner

28 May 2019

Ron Weasley in tax battle with HMRC

Nordens Partner

28 May 2019

The taxman called and it cost me thousands

Nordens Partner

28 May 2019

Make it happen in 2019

Nordens Partner

28 May 2019

Your VAT queries answered

Nordens Partner

28 May 2019

A simple guide to creating habits

Nordens Partner

28 May 2019

New HMRC guidance for directors’ returns

Nordens Partner

28 May 2019

We beat HMRC's record!

Nordens Partner

28 May 2019

The latest bogus calls claiming to be HMRC

Nordens Partner

28 May 2019

Seven things we can learn from Olivia Colman

Nordens Partner

28 May 2019

Lord Seb Coe - a visionary leader

Nordens Partner

28 May 2019

Insurance for Contractors and Freelancers

Nordens Partner

28 May 2019

What businesses need to do in a recession

Nordens Partner

28 May 2019

What’s your breakeven point?

Nordens Partner

28 May 2019

Your VAT queries answered

Nordens Partner

28 May 2019

Is your finger on the pulse of pricing?

Nordens Partner

28 May 2019

Working parents: reduce your childcare costs!

Nordens Partner

28 May 2019

Why is there VAT on school uniforms?

Nordens Partner

01 February 2019

Distance Selling: another VAT win for Sports Direct

Nordens Partner

28 January 2019

Climb your mountain, achieve your goals

Nordens Partner

27 January 2019

Capital Gains tax hike and the accidental landlord

Nordens Partner