We’re at that time of year again. Some people dread it but there are things that can be done now to ensure the entire process goes much more smoothly. So if you’re looking to get your business ready for the end of the Financial Year get ahead now with these tips
If you’re an employer you’ll most likely be paying your employees through payroll software. In preparation for the end of the tax year most payroll software providers roll out updates to the program. Make sure you have updated yours to the latest version. It should include all the rates and allowances for the new tax year.
Check Work In Progress
If you run a service based business it’s likely you’ll have work in progress (WIP) at the end of your accounting year. If you haven’t already, then now is a great time to have a look over this. You should be looking to see whether there is any WIP that can or should be billed now and also whether there is anything that should be written off. This should only really be done where there is little prospect of recovery, or where it is not economic to do so. In other words where the amount owed is exceeded by the cost of recovering it.
There are number of things around payroll that you could be doing to get ahead but also some things that have to be done and done by certain dates:
- Firstly, process the final payroll run for the year and carry out any associated month end tasks
- Secondly, ensure you are up to date with PAYE and any outstanding amounts are paid or scheduled to be paid HMRC
- Finally, send your final Full Payment Submission for the year to HMRC via RTI and, if the software you use is set up for it, make sure to mark it ‘Final Return’. If this is not possible then it’s likely the software you’re using automatically schedules an EPS marked ‘Final Return’ instead. This will show no figures but will have a box ticked ‘Final Return’. This doesn’t have to be done before the end of the tax year but must be done before the 20th of April 2021.
- On or before March Paydate Final FPS for 2020/21 due
- 20th April 2021 Final EPS submission for 2020/21 due
- 31st May 2021 P60s must be given to employees by this date
- 6th July 2021 Expenses and benefits annual returns due (P11D)
These must be issued to all employees working for your business at 5th April. It tells your employee how much they have earned and how much tax and National Insurance they have paid. It’s an important document for your employees so make sure that they do receive it.
If your VAT year aligns with the tax year your final VAT quarter (Quarter 4 20/21) return will be due shortly. Making Tax Digital has made submitting returns to HMRC a lot easier but there are still things you need to do. Such as:
- Ensure all bills and invoices have been posted to your accounting software. This includes sales invoices, purchase invoices, credit card receipts and expense claims. This will ensure your bookkeeping is up to date.
- Carry out a bank reconciliation to ensure the correctness of what has been posted to your accounting software.
- Make any necessary VAT adjustments, such as Fuel Scale Charges in the appropriate place within your accounting software.
- Carry out a VAT reconciliation and ensure there are no differences.
This is not an exhaustive list and tasks will differ from business to business but it does provide an overview of some of the things that can be done to get your business ready for the end of the financial year.
There are other things that need to be done in relation to the end of the financial year but can’t be done until after the date of your financial year end. I’ll soon be creating another post covering this.