We've bumped and bounced our way to the end of another tax year - and getting ahead of your administration and accountancy tasks is a great way to start the new tax period as you mean to go on!
The SAS Accounting team is always on hand to help and appreciate that it can be an overwhelming challenge if you're dealing with payroll returns, issuing P60s and filing self-assessment documents all at once.
Our guide below lists all the steps you need to tick off your year-end tax list, whether that coincides with your financial year or links solely to HMRC-related tasks.
Key Dates for the HMRC Payroll Year-End
Each period, the tax year ends on 5th April (not 31st March as many start-up businesses believe!).
That means you need to ensure that your HMRC payroll returns are completed and submitted in good time.
From 6th April, there will be several things to do, such as:
- Updating your payroll records.
- Amending your director's salary (NB see our article on Calculating the Optimal 2022/23 Director's Salary for guidance!).
- Adjusting for National Living Wage increases.
- Accounting for new tax codes and National Insurance deductions.
Much of the detail is included in our guide to Preparing for the 2022 Tax Year.
The next job is to issue P60s to all employees - while you can produce paper forms, an online P60 is more efficient in terms of paper waste and easier to email to colleagues working from home.
You should produce P60 forms by 31st May, but the sooner, the better, as many staff may be waiting for this form to claim Income Tax rebates or use it towards credit applications.
Finally, make sure you have all your employee expenses claims relating to the current tax year, and ensure you've totalled up any benefits paid for inclusion on P11D forms.
Business Tasks at Tax Year-End
Once your payroll is in hand, the next step for self-employed business owners is the self-assessment process.
Of course, you have until 31st January 2023 to file returns and pay tax owing, but it makes sense to submit your information much sooner if you are anticipating a refund!
It's also good practise to reassess your cash flow forecasts and expected revenue, as well as evaluate whether you've got plenty of time before your financial year-end to account for unexpected liabilities, for example:
- Ensuring all expenses are claimed and submitting invoices for any outstanding work.
- Chasing late payments and overdue debtor accounts.
- Carrying out checks on your forecasts, particularly where employment expenses are now likely to increase.
These duties may apply to employers as well as business owners. For example, if your staff have unclaimed receipts, you'll want to track these down now.
Expenses are tax-deductible, so it will impact your Corporation Tax liability when it comes time to file, and you won't inadvertently carry over payroll-associated costs to the new tax year.
Making Tax Digital in 2022/23
The other element to be mindful of is that the deadline for Making Tax Digital is 1st April 2022 (just a few days before the start of the new tax year).
If you're VAT registered, whether voluntarily or not, you must be ready to submit digital VAT returns from the start of next month.
Please visit our publication covering the Countdown to MTD for VAT if you need to refresh your memory about any of the new legislation.
Note that financial statements and Corporation Tax aren't due (or payable) until nine months after your financial year-end.
Still, it's important to remember that many businesses, particularly those in the public sector, trade on the same 6th April - 5th April calendar to streamline their accounting processes.
Therefore, it's likely that if you work in this sector or supply/buy from public businesses, they'll also be hard at work tidying up accounts and closing overdue amounts to ensure they're in a good position to file quickly.
Please get in touch with the SAS Accounting team if you'd like any further advice about the end of the tax year, forthcoming changes, or what they mean for your finances!