P60s and the payroll year-end: the March routine that stops April penalties


The payroll year-end does not start in April. It starts in March, with a short checklist that decides whether April is calm or chaotic. Employers who run this routine every March file cleanly and hand out P60s without thinking about it. Here is the routine.

1. Reconcile the payroll against the accounts

Before anything is finalised, check that the total pay run for the year matches what actually left the bank and what sits in the payroll control accounts. Small differences accumulate silently over twelve months. March is the month to find and fix them, while there is still time to correct through the payroll rather than through amended filings.

2. Chase the leavers and starters paperwork

Every employee who left during the year needs a P45, and the final payroll records need their correct leaving dates. The most common year-end error is a leaving date that is wrong by a month, which then flows into the employee's tax code and their P60. Check the dates now.

3. Confirm benefits and expenses are captured

Anything reportable through P11Ds or payrolled benefits needs to be complete before the year closes. Company cars, private medical insurance, beneficial loans: if finance knows about it but payroll does not, the reporting will be wrong.

4. Review directors' pay arrangements

If directors take a salary plus dividends, confirm the salary figures are final before the year closes. Directors' National Insurance is calculated on an annual basis, unlike employees, so a late change to a director's salary has different consequences.

5. Prepare the final Full Payment Submission

The final FPS of the year carries the year-end declaration. It needs to be accurate because it is the figure HMRC holds against the employer's record for the whole year.

6. Issue P60s by 31 May

Every employee on the payroll at 5 April must receive a P60 by 31 May. This is a hard deadline, not a target. Build the distribution into the March plan so May is just execution.

7. Archive the year properly

Payroll records must be kept for at least three years from the end of the tax year. A clean year-end archive, payroll reports, FPS records, P60 copies, and supporting documents, filed and labelled, is what makes an HMRC enquiry cheap to handle instead of expensive.

Making it a system, not a scramble

The whole routine fits into a single focused week in March if the monthly payroll has been clean. Monthly reconciliation, prompt leaver processing, and benefits captured as they arise turn the year-end into a checklist instead of a project. For employers without an in-house payroll team, this is exactly the kind of seasonal workload that benefits from specialist support. Finex Outsourcing provides payroll processing with month-end review controls that keep the year-end routine running on rails.


 

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