As the 2024/25 tax year draws to a close, employers should now begin preparing for the new financial year starting 6th April 2025. For many businesses, tax year end can be a time of increased administrative pressure, complex compliance tasks, and tight HMRC deadlines.
Having a structured process in place is essential, and working with an outsourced payroll provider like Qualitas can reduce risk, save time, and ensure accuracy throughout this key period.
Here’s your essential tax year end checklist, along with how Qualitas Payroll supports your business at every stage.
1. Submit Final FPS to HMRC
You must send your final Full Payment Submission (FPS) for the 2024/25 tax year on or before your employees’ final payday of the tax year. This confirms to HMRC that no more payments will be made in this period.
With Qualitas: We submit all required FPS and EPS files on your behalf, ensuring accuracy and full HMRC compliance.
2. Process Leavers and Final Pay Runs
Ensure all leavers are processed correctly and any final payments (including bonuses or commissions) are included in your final payroll run for the year.
With Qualitas: All leavers are managed through our system and supported by your dedicated payroll manager, ensuring final pay is accurate and compliant.
3. Distribute P60s to Employees
P60s must be provided to all employees who were on your payroll as of 5th April 2025. These must be issued no later than 31st May 2025.
With Qualitas: We can generate and distribute P60s digitally or via your preferred method, accurately and on time.
4. Apply New Tax Codes for 2025/26
HMRC issues new tax codes for employees, and these must be applied from the first payroll of the new tax year. Using incorrect codes can lead to tax underpayments or overpayments.
With Qualitas: We apply all tax code changes automatically, using real-time HMRC updates via RTI submissions.
5. Update Employee Pay Rates
From April 2025, minimum and living wage rates are increasing. You must ensure that all employees are paid in line with the new statutory rates. For example:
- National Living Wage (21+): £12.21/hour
- 18–20: £10.00/hour
- 16–17 and Apprentices: £7.55/hour
With Qualitas: We help you review and implement any required pay rate updates, ensuring full compliance with wage legislation.
6. Review Payroll Costs and Employer NICs
From April 2025, Employer NIC contributions will increase from 13.8% to 15%, and the secondary threshold will reduce to £5,000. This will significantly increase payroll costs for many businesses.
With Qualitas: Our team can help you model the impact of these changes and identify cost-saving opportunities through smarter payroll structuring.
7. Claim Employment Allowance (If Eligible)
Employment Allowance will rise from £5,000 to £10,500 from April 2025, and the £100,000 eligibility cap will be removed, opening the door for more employers to benefit from reduced NIC liability.
With Qualitas: We advise on your eligibility, manage the claim, and apply the relief directly through payroll.
8. Prepare for the First Payroll of 2025/26
Once the new tax year begins, you’ll need to process the first payroll accurately, applying all updates, thresholds, and new employee data as needed.
With Qualitas: Your first payroll run of the year is managed in full, with proactive checks and expert oversight.
Why Use an Outsourced Payroll Provider at Year End?
Tax year end is one of the busiest and most critical times of the payroll calendar. Errors or missed deadlines can result in HMRC penalties and employee dissatisfaction. Partnering with a payroll expert like Qualitas offers:
- Stress-free compliance
- Full year-end reporting and submissions
- Seamless transition into the new tax year
- Dedicated support from your own account manager
- Real-time reporting and insights
A smooth tax year end sets the tone for the year ahead. Whether you’re a small business looking to streamline operations or a larger organisation seeking accuracy and control, outsourcing your payroll can help ensure a compliant, efficient, and confident transition into the new financial year.
Need help preparing for the 2025/26 tax year?
Contact Qualitas Payroll today to discuss how we can take care of your payroll, so you can focus on your business.