Payroll Year End Guide

Updated April 2026 · UK Payroll

The tax year ends on 5 April. You have known this date for months.

But the week it arrives, the to-do list is longer than expected: the final payroll run needs a specific submission flag, three different deadlines are spread across the next three months, and at least one employee is already asking where their P60 is.

If you are running year-end for the first time, or the first time without someone looking over your shoulder, this guide covers every step in sequence.

What happens at the end of the tax year in payroll?

The UK tax year runs from 6 April to 5 April the following year.

When it closes, you are closing a complete reporting period with HMRC, finishing a payroll run. That means submitting the correct end-of-year flags, issuing documents to employees, and filing a separate return for any benefits you have provided.

Each of those tasks has its own deadline, and missing one triggers different consequences.

The process breaks into two distinct phases. The first happens in the days around 5 April and covers your final RTI submissions. The second runs through to late July and covers documents and payments related to expenses and benefits.

Both phases require separate actions; finishing the first does not automatically trigger the second.

How do you submit the final FPS and mark it as the last in the year?

The Full Payment Submission (FPS) is the RTI file you send to HMRC on or before every payday. Your last FPS of the tax year needs one extra element: the “last in year” indicator.

This flag tells HMRC that the submission is final and that the year’s figures are complete.

Most payroll software sets this indicator automatically when you process the final pay run of the tax year. The risk is assuming that it has.

Before submitting, open the FPS record in your software and confirm the indicator is present.

If your software processes the final pay run in March (for employees paid mid-month) and the tax year end is 5 April, you need to be certain the software is treating that run as year-end, another monthly submission.

If you realise after submission that figures are wrong, you cannot simply resubmit the FPS. You will need to submit an amended FPS or an Earlier Year Update depending on how your payroll software handles corrections.

This is one of the more time-consuming problems in year-end, and catching errors before submission is worth the extra check.

When must you send the EPS, and what does it cover?

The Employer Payment Summary (EPS) is a separate RTI submission used to claim reductions against what you owe HMRC. It is how you tell HMRC about statutory payments you have made to employees:

• Statutory Maternity Pay
• Statutory Paternity Pay
• Statutory Parental Bereavement Pay
• and others

The government contribution on those payments is then offset against your PAYE bill.

For year-end purposes, you must submit the EPS by 19 April if you want to recover statutory payments made during the final tax month (6 March to 5 April).

Miss that date and you cannot recover those amounts for the year through the EPS route.

You would have to claim a refund separately, which takes longer and involves more process. If you have made statutory payments in the final month, submit the EPS before 19 April, not after.

You should also submit a nil EPS (showing no payments) if you did not pay any employees in the final tax month. This confirms to HMRC that the absence of an FPS was deliberate, not an oversight.

What is the P60 deadline, and who needs to receive one?

A P60 is the end-of-year certificate summarising an employee’s total pay, tax deducted, and National Insurance contributions for the tax year. You must issue a P60 to every employee in your employment on 5 April, the last day of the tax year.

Employees who left before that date do not receive a P60 from you; they will have received a P45 on leaving.

The deadline is 31 May following the end of the tax year. If the tax year ends 5 April 2026, P60s must reach employees by 31 May 2026.

Failing to issue by that date is a compliance failure. Employees need their P60 to check tax credits, complete self-assessment returns, and apply for mortgages.

Chasing a late P60 in June or July is a straightforward way to generate avoidable complaints.

Electronic P60s are now standard at most organisations, but the consent requirement catches some employers out. If you have not already collected written consent from all employees for electronic delivery, paper is the safer default this year.

Set up the consent process before the next tax year closes.

What is the P11D, and what is the deadline for submitting it?

If you have provided employees (or directors) with any expenses or benefits that were not processed through payroll (company cars, private medical insurance, interest-free loans over £10,000, or non-business entertainment, for example), you are required to report those to HMRC using form P11D.

One P11D is filed per employee who received such benefits.

You also need to submit form P11D(b), which is the summary of the Class 1A National Insurance contributions you owe on those benefits.

The P11D deadline is 6 July following the end of the tax year. For the 2025/26 tax year, that means 6 July 2026. Submitting late results in an automatic penalty of £300 per form, with an additional £60 per day for continued failure.

Given that a medium-sized business might have 30 or 40 P11D forms to file, late submission is an expensive oversight.

One distinction matters here: if you have been payrolling benefits, reporting the cash equivalent through the payroll and taxing it in real time rather than on a P11D, you may not need to file P11D forms for those benefits.

Payrolling benefits has been mandatory for new registrations since April 2026.

Check which of your benefits are payrolled and which still require P11D reporting before assuming your obligations either way.

The most common P11D error is incomplete data from third parties, particularly where company car details or private medical insurance costs are confirmed late by providers.

Start collecting those figures in February or March rather than waiting until June.

How do you pay the Class 1A NIC that is due after P11D submission?

Once you have filed P11D(b), you know your Class 1A NIC liability. Class 1A NIC is employer-only: you do not deduct it from employees. The rate for 2025/26 is 15% on the total value of benefits reported on P11D.

Payment is due by 22 July if you are paying electronically (19 July if paying by cheque). Use HMRC’s PAYE payment reference when making the payment, and include the correct reference format to ensure HMRC allocates the payment to the right period.

Paying late attracts interest and potentially a penalty, so factor the payment date into your cash flow planning in June.

The payment reference for Class 1A NIC is your 13-character accounts office reference followed by “1A” and the tax year (for example, 123PA001234561A2526 for the 2025/26 year).

Using the wrong reference is one of the more common causes of HMRC chasing payments that have already been made.

What reconciliation steps should you complete before closing the year?

Year-end reconciliation is the process of confirming that what you submitted to HMRC matches your internal payroll records, and that both match what employees have actually been paid.

It sounds straightforward, but in practice payroll errors accumulate over 12 months: an incorrect gross pay figure in October, a late submission in January, a missed NIC recalculation after a salary change.

If you find a discrepancy after submitting the final FPS, correct it promptly. An amended FPS can be submitted for the same tax year if the correction relates to that year.

If you discover it after the year closes, an Earlier Year Update (EYU) is required for tax years up to 2019/20; for 2020/21 onwards, an amended FPS is the correct route.

Check HMRC’s guidance for the specific year you are correcting.

What happens if you miss a year-end deadline?

HMRC issues penalties automatically for most year-end failures. The consequences are worth knowing before the deadlines pass, not after.

Late FPS submission during the year is subject to a monthly penalty that scales with the number of employees: £100 per month for 1-9 employees, up to £400 per month for 250 or more. There is a three-day filing concession in practice, but HMRC does not advertise it and it is not guaranteed.

The “last in year” FPS is treated like any other monthly filing.

Late P60 issue does not carry a fixed financial penalty, but HMRC can investigate and take action if employees cannot obtain their year-end certificate when they need it.

The reputational cost with your workforce is often the more immediate concern.

Late P11D carries the automatic £300 per form penalty with £60 per day thereafter. Class 1A NIC paid late attracts interest from the due date plus a surcharge if payment is more than 30 days late.

None of these penalties are difficult to avoid if the deadlines are tracked in advance.

Frequently asked questions