Final Payroll 2024

With the end of the 2023/24 tax year approaching, the time has come to prepare the final payroll. Submitting the last payroll of the year has a few extra steps. It’s important to know how to prepare for it.

When does the Final Payroll End?

The final payroll will be the last payroll you submit before the tax year ends on 5th April 2024. If your workers are paid monthly their last payroll will always be Week 52 as they will always have 12 pay days. For weekly, fortnightly, and four-weekly payrolls, they could have a Week 53.

Week 53 payrolls are caused when there are 53 pay days during the year. If you pay your employees on Fridays, this year you may have a week 53 payroll if you last processed your payroll on the following dates:

  • Any new employees are set up on your payroll software.
  • Any employees that have left have been processed as leavers.
  • Tax codes for 2024 are up to date.

What Should I Check Before Running the Final Payroll?

Correcting mistakes on the final payroll can be more difficult than other periods. Because of this, we would recommend double-checking all figures before processing them or sending them to your payroll provider. You should also check for the following:

  • Any new employees are set up on your payroll software.
  • Any employees that have left have been processed as leavers.
  • Tax codes for 2024 are up to date.

How do I Submit the Final Payroll?

HMRC will be notified that a submission is for the final payroll through either a Full Payment Submission (FPS) or Employer Payment Summary (EPS). If you outsource your payroll, this will be done by your provider.

How do I Correct the Final Payroll?

If you need to change the figures included on the final payroll, the corrected FPS must be submitted by 19th April 2024.

If the wrong payment date is shown on the FPS, the corrected FPS must be submitted by 5th April 2024.

What are P60s?

A P60 is a form issued to all employees showing their earnings and tax deductions for the tax year.  It is needed when completing the employment section of a Self-Assessment tax return. P60s must be sent before 31st May 2024.

What are P11Ds?

P11Ds are forms that must be submitted to HMRC to show the expenses and benefits provided to employees during the tax year. Examples of benefits include company cars, interest-free loans, and private medical insurance. The deadline for 2024 P11D submissions is 6th July 2024.

Changes from April 2024

Once the final payroll has been submitted, you should review the changes that may be needed during the new tax year. Increases to the National Living Wage were announced in November, whilst a decrease in National Insurance was confirmed during the Spring Budget.

You should also check if you have received any 2025 tax codes for your employees. These will be received either pay post or through your HMRC PAYE portal.

 

If you need any further information about the final payroll for 2024, or any other payroll services, please do not hesitate to contact us. We also provide a Payroll Year End Checklist which could be used as a guide.

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Spring Budget 2024

On 6th March 2024, Chancellor of the Exchequer, Jeremy Hunt, announced the government’s plans for the UK economy in the Spring Budget. With a focus on lowering inflation and increasing the countries GDP per capita, the chancellor set out plans to be enrolled over the next few years. But how will these changes affect business owners and taxpayers?

National Insurance Cuts

The most notable change announced during the Spring Budget was a 2% cut in employee National Insurance (NI). This is on top of the 2% cut announced in the Autumn Statement last November. This means that, from 6th April 2024, employee NI will drop to 8%; the lowest rate since 1975. Those earning an average salary of £35,400 will save £450.

It is important to note that these changes only apply to the basic NI rate. Any earnings over £4,189 per month will still be taxed at 2%.

Previously, NI for the self-employed (known as Class 4) was set to decrease to 8% from April 2024. The Spring Budget has announced a further 2% reduction. This means those who are self-employed will be taxed at 6% from next month.

Employer NI contributions will not be changing according to the Spring Budget. The rate will remain at 13.8%.

VAT Threshold

Another significant announcement from this year’s Spring Budget relates to the VAT threshold. The threshold will increase from £85,000 to £90,000. This is the first rise the VAT threshold has seen since 2017.

The increase has been introduced to prevent smaller businesses from falling into the VAT regime due to rising inflation and the cost of living crisis. However, many are worried that this increase of only £5,000 may not be enough to cover the cost increases.

Capital Gains Tax

The higher rate of Capital Gains Tax (CGT) on residential property sales will decrease. The Spring Budget states that the rate is being cut from 28% to 24% from 6th April 2024. The basic rate on property sales will remain at 18%. CGT only applies to certain property sales – you can find out more here.

High Income Child Benefit Charge

A raise of the High Income Child Benefit Charge (HICBC) threshold to £60,000 was also announced in the Spring Budget, along with raising the withdrawal taper from £60,000 to £80,000. This will increase from April 2024.

The charge allows child benefits to be taken back from higher earners through the tax system and has been unchanged since its introduction in 2013.

The rise will be introduced to prevent basic rate taxpayers having to complete tax returns for only their HICBC. This issue was caused by the tax thresholds increasing for the 2021/22 tax year, pushing the higher-rate bracket above the original £50,000 threshold.

Additional Changes

The following are additional changes announces during the Spring Budget:

  • Non-Dom status will be abolished from April 2025. A new system will be introduced where no tax will be paid on non-UK income for the first 4 years of being in the UK. UK tax rates will apply after this period.
  • Multiple dwellings relief will be abolished. This allowed Stamp Duty Land Tax relief for transactions where two or more dwellings were purchased at once.
  • The furnished holiday lets regime will cease from April 2025. This allowed short-term lets to receive tax reliefs like small businesses.
  • A New UK ISA will be introduced, allowing individuals an additional £5,000 annual investment in UK assets.
  • Fuel Duty freeze has been extended for a further 12 months.
  • Alcohol Duty will be frozen until February 2025.
  • Vape Duty will be implemented from October 2026. An increase in Tobacco Duty will occur at the same time.

 

If you have any questions about how the budget could affect you or your business, please do not hesitate to contact us.

 

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