UK Year-End Payroll Activities and Tips 2020-2021

UK Year-End Payroll Activities and Tips 2020-2021 featured image

Payroll Teams in the UK will soon face year-end payroll activities. Having a structured year-end project plan that lists specific tasks and the tasks’ owners is so important. It ensures all identified tasks are carried out, and it gives accountability. This will help take the guesswork and alleviate a lot of the stress that comes with year-end payroll. Now is a great time to start thinking about what reports you will utilize to reconcile tax forms data for your employees.

In order to ensure your business has a smooth transition into the new tax year 21/22, we at Rizing have put together this guide for SAP SuccessFactors Employee Central Payroll (ECP) customers in the order of key dates to support you through your UK year-end activities. Read on below if your keen to avoid the hefty penalties that go with missing deadlines.

Not yet an ECP Customer? Read our whitepaper on rethinking, reimagining, and redesigning payroll with SAP SuccessFactors.

A List of Year-End Payroll Activities for the UK

Here are the tasks that should be completed before April:

  • Prepare your analysis on support packs and apply legislation updates.
    • Rizing advise customers to schedule a maintenance upgrade 3 times a year at a minimum to avoid a year-end rush.
    • Support Packages are a collection of one or more patches/notes containing corrections or new changes – both functional and legal.
    • Support packages are released to customers according to the planned release to customer dates set by SAP – see https://support.sap.com/en/release-upgrade-maintenance.html – SAP have planned released dates until December 2021.
    • As a rule of thumb – SAP generally ensure any budget announcement changes are delivered via Support Packs in the final period of a countries tax year. For the UK – this will be March 2021.

Note: Always plan your SAP HRSP upgrades with this release in mind – from previous experience, we know SAP can make last-minute corrections.

  • Processing payroll year-end
    • Ensure that you have processed all employees that have left on or before the 5th April 2020 in this period.
    • Tick the Final Submission declaration checkbox in report PC00_M08_RTI_FPS when e-filing pay period (12) for tax year 20/21.
    • Once you have finished your March Payroll – and the Support Packs have been applied to your live system, you will need to run the tax-code uplift program PC00_M08_UTCU in ECP before Period 1 of the new tax year. SAP will deliver the tax increase and uplifts via HRSPs.

Here’s what to accomplish in April and beyond:

  • Final payroll year-end submission deadline – 19th April 2021
    • HMRC provide businesses an opportunity to make final amendments on submissions for 2020/21. Use report PC00_M08_RTI_FPSA to make any amendments.
    • After the cut-off date, you are unable to make changes to YTD submissions for the previous tax year ending 4th April 2021.
  • PAYE Forms: P60 – 31st May 2021
    • A P60 is a form that explains how much you’ve earned over the tax year (which runs from 6 April to 5 April the following year). It also includes how much you’ve paid in National Insurance contributions and Pay As You Earn (PAYE) income tax. Use report PC00_M08_RPCP60G0 in SAP to produce your employees’ P60s.
  • PAYE Forms: P11D – 6TH July 2021
    • These are expenses and benefits that companies provide to employees, for which the employees are liable to pay tax. A P11D needs to be submitted to HMRC every tax year – for each employee. Use report PC00_M08_CTXB in SAP to produce P11D forms.

Note: As a prerequisite, you must have configured the cumulation wage types in SAP for taxable benefits to be able to report on this in SAP.

Wrapping Up 2020-21 Year-End Payroll Activities

If you’ve done the legwork ahead of time, then that should take some pressure off when it comes to kicking off the next year. Taking that pressure off is importing, because according to the UK government: businesses will receive a penalty of up to £100 per 50 employees for each month or part month your P11D(b) is late and charge penalties and interest if you’re late paying HMRC.

There are also penalties incurred from incorrectly submitted P11D forms, so employers need to exercise care and vigilance when going through the process. Staying on task with your year-end payroll activities will lead to less stress for you and your payroll team.

Looking for year-end payroll activities for other countries? Here are tips for: US | Canada | Singapore | Malaysia