Sage One Guide to Payroll Year End 2014/2015

Payroll
year end
guide
2014/2015
Sage One
Payroll
Sage One Payroll year end guide
Contents
Welcome to your guide to payroll year end 2014/2015
2
Part 1 - Prepare for your year end
4
1.1 Check your Government Gateway account
4
1.2 Check if you have an extra pay run
5
1.3 Process your leavers
6
1.4 Process your final pay run for 2014/2015
6
Part 2 - Run your year end
8
2.1 Review your employees' P11 values
2.2 Submit the final employer payment summary (EPS)
2.3 Produce your P60s
8
9
11
Part 3 - Starting the new tax year
13
3.1 Update NI categories for employees' under the age of 21
13
3.2 Update your employees' tax codes
13
3.3 Claiming employment allowance
14
3.4 Claiming small employers' relief
15
3.5 Earlier year update (EYU)
16
3.6 Legislation changes for 2015/2016
16
1
Sage One Payroll year end guide
Welcome to your guide to payroll year end 2014/2015
This guide takes you through the payroll year end process in three easy to follow parts:
1.
Prepare for your year end.
2.
Run your year end.
3.
Starting the new tax year.
Payroll year end and key dates
Although processing your year end in Sage One Payroll is quick and simple, there are some
key dates you need to be aware of.
5 April
The last day of the 2014/2015 tax year.
6 April
The first day of the new tax year.
19 April
Deadline for final submissions of 2014/2015 tax year,
including your end of year declarations.
20 April
From this date, you can submit an earlier year update
(EYU) to HMRC to notify them of corrections to the
2014/2015 tax year.
31 May
You must provide all employees still working with you on 5
April 2015, with a P60 by this date.
Get more information this year end
To make this payroll year end easier than ever, you can find further help and support, including
quick videos at: http://help.sageone.com/en_uk/payroll/payroll-year-end
To process from 6 April 2015 before you run year end
With Sage One Payroll, you can process in the new tax year before you run your year end.
Before you do this however, you must:
l
l
Process your employees' final pay run in 2014/2015 and submit your full payment
submission (FPS). and if required, submit your employer payment summary (EPS).
Update national insurance (NI) categories for an employees under 21 years old.
2
Sage One Payroll year end guide
l
Update your employees' tax codes for 2015/2016.
l
Remember to make your final submission of the tax year by 19 April 2015.
For more information, please proceed to Part 3 - Starting the new tax year.
3
Sage One Payroll year end guide
Part 1 - Prepare for your year end
To ensure your year end runs smoothly, there are a few important things you need to do
before processing your year end.
1.1 Check your Government Gateway account
Before you submit any information to HMRC you must register for a Government Gateway
account and enrol for the PAYE for Employers service.If you already have an account, you
should check it’s still active. If you’re not registered, or if your status is inactive, HMRC will
reject your submissions.
To register for an account
1.
Visit www.gateway.gov.uk > click the relevant register option > Register.
2.
Enter your name, email address and password > Submit.
3.
Make a note of your user ID, you can print this if required.
Keep your password and user ID safe. You need to enter these each time you log into the
Government Gateway and when you submit online.
4.
Select the I have made a note of my User ID check box > Continue.
5.
Select PAYE for Employers > Continue > to complete your registration, follow the onscreen instructions.
Once you’ve registered, HMRC will send you an activation code. This can take up to seven
days and you must activate it within 28 days. If you don’t, you’ll need to register again. Once
you’ve activated your account, you can submit online.
If you need further help please contact HMRC, Online Services helpdesk on 0300 200 3600.
To check your account
1.
Visit www.gateway.gov.uk > Enter the Government Gateway.
2.
Enter your user ID and password > Log in.
3.
Manage Services > make sure you’re registered for the PAYE for Employers service.
4.
Check your tax office number and reference are correct and your status is active.
4
Sage One Payroll year end guide
1.2 Check if you have an extra pay run
Monthly paid employees never have an extra pay run. If you pay all of your
employees monthly, please proceed to 1.3 Process your leavers.
If you pay your employees weekly, two weekly or four weekly and your normal pay date falls
on Sunday 5 April, you have an extra pay run at the end of the tax year. The extra pay run is
commonly known as week 53.
This is because the number of days in the tax year doesn’t divide into a whole number of tax
weeks.
If your normal pay day falls on any other day of the week, then you don’t have
an extra pay run and should not process on Sunday 5 April 2015.
To check if you have an extra pay run
1.
Settings > Payroll Settings.
2.
Calendar Settings > View Pay Calendar.
Extra pay runs appear as follows:
l
Weekly payroll – Week 53
l
Two weekly payroll – 2-Week 27
l
Four weekly payroll – 4-Week 14
If you have an extra pay run, you don't need to do anything differently. Simply process this as
normal, just as you would any other pay run.
How tax calculates in an extra pay run
To comply with government legislation, tax calculates using a week 1 / month 1 free pay
allowance and ignores previous pay and tax and automatically calculates on a non-cumulative
basis.
Non-cumulative means that the employee’s year to date pay and tax totals are
not used. Tax is calculated as if it's the first pay run of the tax year. This ensures
the employee does not receive any extra tax-free allowances.
5
Sage One Payroll year end guide
How national insurance (NI) calculates in an extra pay run
For employees, NI calculates as in any other pay run, using the weekly, two weekly or four
weekly thresholds, as appropriate.
For directors using the calculate NI per pay run method, their NI recalculates cumulatively in
the extra pay run using the annual thresholds.
For directors that use the calculate NI cumulatively method, their NI in the extra pay run
calculates cumulatively as in any other pay run.
1.3 Process your leavers
Before you process your final pay run, you need to enter the last working day for any
employees who have left your employment during this period.
1.
Employees > click the cross button
2.
Enter the employee's last working day > Save.
next to the relevant employee.
For more information about processing leavers, please visit,
http://help.sageone.com/en_uk/payroll/payroll-employee-leaving-company
1.4 Process your final pay run for 2014/2015
To ensure that all of your end of year values are correct, you should process any advanced
holiday pay, if necessary, and complete your final pay run in the 2014/2015 tax year.
For more information on advanced holiday pay, please visit,
http://help.sageone.com/en_uk/payroll/payroll-recording-advance-holiday-pay
If you process more than one pay cycle, for example, weekly and monthly, make sure that
you complete the last pay run of the tax year for each pay cycle.
You must submit your full payment submission (FPS) for the last pay run, record your P32
payment to HMRC, and if necessary submit an employer payment summary (EPS) as
normal.
To send the FPS
1. From the Confirm Pay stage of a pay run > click Complete Pay Run.
2. Check or enter you company details and Government Gateway credentials are correct.
If you’ve entered them before and chose to save them, to check your credentials, clear the
Use saved HMRC login check box.
6
Sage One Payroll year end guide
3. If you're submitting your FPS late, select the relevant reason.
4. Confirm > Submit the FPS.
To send an EPS
If you’re reducing your liability to HMRC, you need to submit an EPS after you process your
final payroll. You can do this when you record your payment to HMRC.
1. Summary > Record Payment / EPS.
2. Complete the wizard as required > Submit.
For more information on processing pay, please visit,
http://help.sageone.com/en_uk/payroll/payroll-completed-pay-runs
If you have any outstanding or failed submissions for the 2014/2015 tax year,
these appear in the HMRC section on the Summary tab.
For more information about submission errors, please visit,
http://help.sageone.com/en_uk/payroll/hmrc-submission-errors
Preparation checklist
Step
Completed? Yes/No
I've checked my Government Gateway account.
I've checked for an extra pay run.
I've entered the last working day for any employees who left in
this period.
I've processed any advanced holiday pay and my final pay run.
I've submitted the FPS.
If applicable, I've submitted the monthly or quarterly EPS
Congratulations. You've now finished your processing for the 2014/2015 tax year
and are ready to process your year end.
7
Sage One Payroll year end guide
Part 2 - Run your year end
You can process your year end in Sage One Payroll in just three simple steps.
2.1 Review your employees' P11 values
You must review your employees' pay to make sure the information you submit to HMRC is
correct.
You can do this using the P11 reports. Each employee has two P11 reports, one for PAYE and
one for NI. You don’t submit these reports to HMRC, however, you must keep them for at
least three years in case of an HMRC inspection.
The P11 reports show the following information:
P11 Deductions Working Sheet (PAYE Details)
l
Employee’s taxable pay
l
Deductions of tax for each completed pay period
l
Previous tax codes
P11 Deductions Working Sheet (NIC Details)
l
Earnings in specific bands
l
Total employee and employer NI contributions
l
Employee only NI contributions
l
Statutory payments
l
Student loans
l
Any changes to your employee’s NI category
To produce your P11 reports
1.
Year End tab > Tax year to report on > 2014/2015.
2.
Review Employee Pay (P11) > View P11 for all employees.
You should now check the values are correct and there are no missing pay runs or incorrect
payment values. If you find mistakes, you must correct these before continuing then check
the reports again.
8
Sage One Payroll year end guide
Once you’re happy they’re correct from the Year End tab, select the Employee Pay has been
reviewed check box.
For more information about correcting pay, please visit,
http://help.sageone.com/en_uk/payroll/payroll-editing-completed-pay-run
2.2 Submit the final employer payment summary (EPS)
You must submit your end of year declarations to HMRC by 19 April 2015.
Your year end EPS submission includes your end of year declarations to HMRC and if
applicable, the date that your business ceased trading.
1.
Year End tab > Tax year to report on > 2014/2015.
2.
Submit EPS > answer the questions by choosing Yes or No.
Did you make any 'free of
tax' payments to an
employee? In other words,
did you bear any of the tax
yourself rather than deduct
it from the employee?
Typical examples of free-of-tax payments are
where you:
As far as you know, did
anyone else pay expenses,
or in any way provide
vouchers or benefits to any
of your employees while
they were employed by you
during the year?
If any employees received incentives or benefits
provided by another business, such as health
insurance, choose Yes
Did anyone employed by a
person or company
outside the UK work for
you in the UK for 30 or
more days in a row?
If anyone employed by another person or company
outside the UK worked for you in the UK for 30
consecutive days or more and haven’t included
them in any online submission to HMRC during the
tax year, choose Yes.
Have you paid any of an
employee's pay to someone
other than the employee,
If you paid part of an employee’s pay directly to
someone else, choose Yes. For example, if you
made a payment of school fees direct to a school
l
l
Guarantee an employee a fixed take-home pay
amount.
Make a ‘cash-in-hand’ payment to an
employee.
9
Sage One Payroll year end guide
for example, to a school?
for an employee’s child.
Are you a service
company?
A service company is a business that provides
services to third parties. This includes limited
companies, limited-liability partnerships and
partnerships. It doesn’t include Sole
traders.companies, limited-liability partnerships and
partnerships. Sole traders are not included.
Tip: For more information about each question, click the help
option to the right of it.
If you need further help about what to answer, you must speak to HMRC.
3.
Choose whether P11D forms are due or not.
4.
If your company has ceased trading in the tax year, select the ceased trading check box
and enter the cessation date.
5.
Next > check the following year to date values are correct:
6.
Amount of CIS
Deductions
suffered
If your company is a limited company and you entered CIS
deductions suffered on your monthly or quarterly EPS
submissions, the total appears here. The value reduces your
overall tax liability.
Total Recovery &
Compensation
for Statutory
Payments
If you paid statutory payments to your employees, the amount
you claimed plus any compensation appears here, including:
l
Statutory maternity pay (SMP)
l
Statutory Adoption Pay (SAP)
l
Ordinary Statutory Paternity Pay (OSPP)
l
Additional Statutory Paternity Pay (ASPP)
Next > check your company details and Government Gateway credentials.
The most common reason for a submission failing is because of incorrect
credentials. If the use saved check box is selected, clear this and check
your details are correct.
7.
Click Submit.
The Year End tab shows if the final EPS submission is successful or if it fails.
10
Sage One Payroll year end guide
If it's successful, you can now produce the P60s. If it fails, you must correct the error then
follow these steps again.
For more information about submission errors, please visit,
http://help.sageone.com/en_uk/payroll/hmrc-submission-errors
You can't submit forms P11D and P11D(b) from Sage One Payroll, but you can
submit them from Sage 50 P11D. If you don't have Sage 50 P11D, for more
information, please visit www.sage.co.uk/shop
2.3 Produce your P60s
You must provide a P60 to all employees still employed by you on 5 April by 31 May 2015.
With Sage One Payroll, you don’t need any P60 stationery. You can simply create a PDF,
which you can then print or email to your employees.
To produce your P60s
1.
Year End tab > Tax year to report on > 2014/2015
2.
Print P60 Certificates.
Depending on your Internet browser the P60s open in a new window or tab and you can
choose to print or save them from your browser file menu.
11
Sage One Payroll year end guide
Year end checklist
Step
Completed? Yes/No
I've checked my employees' pay is correct on the P11 reports.
I've answered the end of year declaration questions and
successfully submitted the final EPS.
I've produced P60s for all relevant employees.
Congratulations. You've processed your year end for the 2014/2015 tax year and
can now get ready for the new tax year.
12
Sage One Payroll year end guide
Part 3 - Starting the new tax year
The new tax year starts on 6 April 2015. Before you start processing in this tax year, there are
a few things you must do.
If you're starting the new tax year before running your year end, remember you
must submit your end of year declarations to HMRC by 19 April 2015.
3.1 Update NI categories for employees' under the age of 21
From 6 April 2015 every employer with employees under the age of 21 will no longer be
required to pay Class 1 secondary NI contributions (NICs ) on earnings up to the upper
earning limit (UEL), for those employees.
If you have any employees under the age 21, those on category A change to M and those on J
change to Z.
A warning message appears when you process your pay run for any employees whose NI
category is not correct for their age. You must correct this before you can proceed by clicking
on the employee in Edit Pay and changing their NI category.
To update an individual employee NI category.
1.
Employees tab > click the employee > Edit.
2.
Change category A to M or J to Z.
3.
Click Save.
For further information you should visit,
https://www.gov.uk/rates-and-thresholds-for-employers-2015-to-2016
3.2 Update your employees' tax codes
From 6 April 2015, all employees with an L suffix tax code increase by 60, for example, 1000L
becomes 1060L. Also anyone with a week 1/Month 1 tax code changes to a cumulative tax
code. HMRC may advise you of changes to tax codes for individual employees using form
P9.
Sage One Payroll automatically calculates the tax code uplift for employees on a L tax code.
and prompts you to check when you process your first pay run in the new tax year.
13
Sage One Payroll year end guide
If HMRC have sent you a P9 notice for individual employees, you must change
the tax code in the relevant employee record.
To update an individual employee tax code
1.
Employees tab > click the employee > Edit.
2.
Change the tax code in the Current Tax Details section > Save.
To update all employees on L tax code suffixes
1.
Process your first pay run in the new tax year.
The Prepare Employee Tax Codes for Tax Year 2015/2016 window appears.
2.
Check each employee in the list to make sure their new tax code is correct.
3.
Click Save.
You've successfully changed your employees' tax codes and can start processing in the
2015/2016 tax year.
3.3 Claiming employment allowance
If you're eligible for employment allowance, you can reduce your employer Class 1 NI
contributions by up to £2,000 per year. If you're unsure whether or not you're eligible, you
should visit www.gov.uk/claim-employment-allowance
To claim employment allowance
You must process all pay runs and submit your FPS returns for your first P32 reporting period
before you can claim employment allowance.
1.
Complete all pay runs for month one or quarter one > select Record Payment / EPS from
the Summary tab.
2.
From the Eligible for NI Employment Allowance drop-down list > choose Yes.
The amount you need to pay to HMRC automatically reduces by the amount you can
claim.
You must leave this as Yes for the full tax year. If you change it to No,
HMRC thinks you’re not entitled to employment allowance and you must
repay any amount you’ve claimed.
3.
Enter payment date > Next.
14
Sage One Payroll year end guide
4.
If applicable, enter any CIS deductions suffered > Next.
5.
Enter your Government Gateway credentials, if they're not already saved.
6.
Click Submit.
You can check the allowance values on the P32 Employer Payment Record report. You can
view this from Pay > click the relevant pay run > P32 Employer Payment Record.
The report shows how your liability is offset by the employment allowance. You can also see
how much you have left to claim from the amount carried forward.
If you claim employment allowance in error
If you claim employment allowance in error, some of your employer NI contributions may be
offset by the allowance when they shouldn’t be. If this happens, you must repay the
allowance you claimed by mistake.
If you have any queries on whether to repay the allowance or not, you should contact HMRC
on 0300 200 3500.
To repay the allowance when you submit your next EPS, you should choose No from the
Eligible for NI Employment Allowance drop-down list, The amount you incorrectly claimed is
added to your employer liability.
3.4 Claiming small employers' relief
Before you start processing in the 2015/2016 tax year, you should check if you qualify for
small employers' relief. If eligible, you can claim small employers' relief on:
l
Statutory maternity pay (SMP)
l
Statutory paternity pay (SPP)
l
Statutory adoption pay (SAP)
l
Shared parental pay (ShPP)
The qualifying conditions are based on the total amount of Class 1 NI contributions paid to
HMRC in the appropriate tax year. For more information, you should visit
www.gov.uk/recover-statutory-payments
To reclaim small employers' relief
You must process all your pay runs and submit your FPS returns for your fist P32 reporting
period before you can claim small employers' relief.
15
Sage One Payroll year end guide
1.
Complete all pay runs for month one or quarter one > select Record Payment / EPS from
the Summary tab.
2.
From the Eligible for small employer’s relief drop-down list > choose Yes.
3.
Enter payment date > Next.
4.
If applicable, enter any CIS deductions suffered > Next.
5.
Enter your Government Gateway credentials, if not already saved.
6.
Click Submit.
Processing in the new tax year - checklist
Step
Completed? Yes/No
I've updated any under 21 employees' NI categories.
I've updated my employees' tax codes.
If applicable, I've claimed employment allowance.
If applicable, I've reclaimed small employers' relief.
3.5 Earlier year update (EYU)
If you need to make corrections to the 2014/2015 payroll after you've submitted the final FPS
for the 2014/2015 tax year, you must report these corrections to HMRC using the earlier year
update (EYU) submission.
From 20 April 2015, HMRC accepts EYU submissions for corrections to 2014/2015 payroll.
For further information about EYU submissions, please visit,
http://help.sageone.com/en_uk/payroll/payroll-earlier-year-update
3.6 Legislation changes for 2015/2016
Sage One Payroll complies with all legislation changes introduced for the 2015/2016 tax year.
You don't need do anything to stay up to date, all the relevant software changes are made
automatically.
For further information about the legislation changes, please visit,
http://help.sageone.com/en_uk/payroll/payroll-legislation-changes
16
Sage One Payroll year end guide
17
Sage One
Payroll