We have written up a small guide for employers on wrapping up your payroll year end 2023-2024 tax year and setting sail for the 2024-2025 tax year.

As we bid farewell to the 2023-2024 tax year and set our sights on the opportunities that lie ahead in the 2024-2025 tax year, it’s time to ensure that our financial ship is sailing smoothly. In this blog post, we’ll explore the essential steps employers need to take to navigate the transition effectively with HM Revenue & Customs (HMRC) in the UK.

Reflecting on the 2023-2024 Tax Year

Before we embark on the journey of the new tax year, it’s crucial to take a moment to reflect on the one that’s just concluded. Here are some key considerations for employers:

• Review Payroll Records: Begin by reviewing your payroll records for the 2023-2024 tax year. Ensure that all employee earnings, deductions, and benefits have been accurately recorded.
• Submit Final Payroll Reports: If you haven’t already done so, ensure that all necessary payroll reports, including P60s for employees, have been submitted to HMRC by the required deadlines.
• Settle Outstanding Obligations: Take stock of any outstanding tax liabilities or National Insurance contributions for the previous tax year and ensure that they are settled promptly to avoid penalties.
• Update Employee Information: Review and update employee information as necessary, including changes in personnel, salaries, and benefits.

Transitioning to the 2024-2025 Tax Year

With the previous tax year neatly wrapped up, it’s time to set sail into the new fiscal cycle. Here’s how employers can prepare for the year ahead:

• Update Payroll Systems: Ensure that your payroll systems are updated to reflect any changes in tax rates, thresholds, allowances, or regulations for the 2024-2025 tax year. One point to remember that you diligently test and prototype your year end on non-production environments – most payroll systems provide you with this support including Unit4 ERP.
• Communicate Changes to Employees: Keep your employees informed about any changes that may affect their pay, taxes, or benefits in the new tax year. Clear communication is key to avoiding confusion and ensuring compliance.
• Plan for Pension Contributions: Review your pension scheme arrangements and plan for any changes or contributions required for the new tax year. Stay abreast of auto-enrolment requirements and deadlines.
• Stay Informed: Keep yourself informed about any legislative changes or updates from HMRC that may impact your payroll operations or tax obligations for the 2024-2025 tax year.

Leveraging HMRC Resources

Throughout the transition period and beyond, HMRC offers a range of resources and support to assist employers. These include:

• Employer Helplines: HMRC operates helplines and support services specifically for employers to address queries and provide guidance on payroll and tax matters.
• Online Services: Utilize HMRC’s online portal for employers to manage payroll, submit reports, and access resources and guidance.
• Guidance Documents: HMRC publishes guidance documents, webinars, and tutorials to help employers understand their obligations and navigate the tax system effectively.
  • HMRC has issued a useful guidance on new rates and thresholds (2024 to 2025) for employers. Follow this link: https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2024-to-2025

Tasks what to do and when

We have compiled and overview of tasks what you need to do and by when:

• Send you final payroll report of the year or otherwise known as FPS – Due on or before your employees’ payday
• Update employee payroll record – Due on from 6 April
• Update payroll software and note if you are on Unit4 ERP cloud, all statutory rates including but not limited to PAYE, NIC and statutory absence calculations would have been rolled out recently in your non-production environments. However you may have additional payroll configuration update so we suggest that you engage with a Payroll Specialist with Unit4 Payroll experience – Due from 6 April in your production environment
• Give your employees a P60 – Due by 31 May
• Report your employees expenses and benefits – Dye by 6 July

Conclusion

As we embark on a new tax year, it’s essential for employers to navigate the transition with diligence, foresight, and a commitment to compliance. By reflecting on the past, preparing for the future, and leveraging HMRC’s resources, employers can ensure smooth sailing ahead in the 2024-2025 tax year. Remember, staying informed and proactive is key to success in the ever-evolving landscape of payroll and taxation.