The PAYE tax year is coming to an end: are you prepared?
Making sure you stick to PAYE tax procedures is incredibly important if you own a business. This means staying up to date with any changes in the system. PAYE tax can already be a stress point without you having to worry about missing new rules and finding yourself with hefty fines.
What are the deadlines?
You will need to process your final payroll for the month, on or before the pay date, as usual. Once this has been submitted to HMRC through the RTI portal, you are able to start on the year end procedures.
You will need to:
- Update your payroll software. Depending on the software you use, this will be before or after the 6th April 2021.
- Generate P60s for ALL employees on the payroll. You need to send these by the 31st May 2021.
- Any expenses and benefits received by employees must be reported by 6th July 2021.
- Create the payroll for the new tax year on your payroll software. Normally they produce in depth “how to” manuals.
- Update employee information. See the following.
Increase in National Minimum Wage
For those employees paid the minimum wage, the amount they will be paid is changing.
Tax code changes
The budget of March 2021 declared that there would be a freeze of the personal allowance amount in April 2022, until April 2026. The planned changes for April 2021 are to go ahead. For the 2021-2022 tax year the allowance increase to £12,570 per year, reflected in a tax code change to 1257L.
Emergency tax codes based on this personal allowance level will be 1257L followed by W1, M1, or X.
The thresholds in which employees will begin to repay their student loans are as follows:
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Why not get in touch with the payroll team at Big Hand? We focus on giving professional business advice and managing your accounting needs with our expertise you don’t have to worry. All you need to do is call us on 0161 327 2911.