March Payroll & Tax Update 2026: What Employers Must Know

March is here, and for UK employers, that means one thing: the tax year-end is fast approaching. With the 5th April deadline looming, now is the time to ensure your payroll is accurate, your records are complete, and your reporting is ready for HMRC.

Getting payroll wrong isn't just an administrative headache—it can mean penalties, upset employees, and a stressful start to the new tax year. But get it right, and you'll sail smoothly into 2026/27 with everything in order.

This March payroll update covers everything you need to know for a compliant, stress-free year-end. Let's walk through the essentials.

Why March Payroll Matters

For most employers, March is the final full month of the tax year. The payroll you run this month, along with any adjustments in early April, forms the basis of your end-of-year reporting. Key deadlines are approaching:

• 5th April 2026: The 2025/26 tax year ends.

• 19th April 2026: Deadline for paying HMRC any tax and NI owed for the 2025/26 tax year (if paying by post).

• 22nd April 2026: Deadline for electronic payment of tax and NI for 2025/26.

• 19th May 2026: Deadline for filing your final Full Payment Submission (FPS) and submitting your Employer Payment Summary (EPS) if applicable.

Missing these dates means automatic penalties. But with a little preparation, you can avoid them entirely.

Your March Payroll Checklist

Work through these steps now to ensure payroll compliance UK standards are met.

1. Check Employee Details Are Correct

Before finalising the year, review your employee records. Accuracy now prevents problems later.

• Action: Verify full names, dates of birth, and National Insurance numbers for all employees.

• Why: Incorrect details on P60s or P11Ds will confuse employees and may require corrections later.

2. Review Payroll Data for the Whole Year

Look back across the 2025/26 tax year and check for consistency.

• Action: Scan for gaps in submissions, unusual payment patterns, or missing leavers.

• Why: HMRC's systems flag anomalies. A clean, consistent record reduces the risk of compliance checks.

3. Process Any Year-End Adjustments

March is the time to correct any payroll errors from earlier in the year.

• Action: If employees were underpaid or overpaid, adjust now through your payroll software.

• Why: Adjustments are easier to handle within the tax year. Once the year ends, corrections become more complex.

4. Prepare for P60s

Every employee who was on your payroll on 5th April 2026 must receive a P60 by 31st May 2026.

• Action: Ensure your payroll software is ready to generate accurate P60s showing total pay, tax deducted, and NICs for the year.

• Why: Employees need P60s for their own tax records and to claim certain benefits. Late or incorrect P60s create unnecessary work.

5. Review Benefits and Expenses

If you provide benefits or pay expenses, March is the time to gather records for P11D reporting.

• Action: Collect information on company cars, private medical insurance, interest-free loans, and any other taxable benefits provided during 2025/26.

• Why: P11Ds must be filed by 6th July 2026, but gathering data now avoids a last-minute scramble.

6. Check Your Full Payment Submissions (FPS)

Your final FPS of the tax year is critical. It must be submitted on or before your last payday of the year.

• Action: Ensure the final FPS includes all payments made in the tax year and is marked as the final submission for the year.

• Why: The final FPS tells HMRC your payroll year is complete. Missing it can trigger automated queries.

7. Submit an Employer Payment Summary (EPS) If Needed

If you're claiming any deductions—such as Statutory Pay recoveries or the Employment Allowance—you must submit an EPS.

• Action: File your final EPS for the year by 19th April 2026.

• Why: Without an EPS, HMRC won't know you're entitled to reductions in what you owe.

8. Plan Your Final Payment to HMRC

Your last payment of the tax year must reach HMRC by 22nd April 2026 (for electronic payments).

• Action: Calculate what you owe for March payroll plus any balancing payment for the year. Schedule the payment in advance.

• Why: Late payments attract interest and penalties. A scheduled payment is a payment you won't forget.

What's New for 2025/26? Key Rates to Remember

As you finalise your year-end, keep these 2025/26 rates in mind. They're the basis for everything you've reported this year.

• Personal Allowance: £12,570

• Primary Threshold (Employee NI): £12,570 per year

• Secondary Threshold (Employer NI): £9,100 per year

• Upper Earnings Limit (Employee NI): £50,270 per year

• Employment Allowance: £5,000 (for eligible employers)

For 2026/27, which starts on 6th April, these rates may change. Stay tuned for announcements in the Spring Budget.

Common Year-End Pitfalls to Avoid

Pitfall 1: Forgetting Leavers

If employees left during the year but you never submitted a leaver date on your FPS, HMRC still thinks they work for you. This affects their tax codes and your records.

Fix: Review your employee list. Ensure all leavers have correct leaving dates on your final FPS.

Pitfall 2: Missing the Final FPS Deadline

Submitting your final FPS after 5th April can cause HMRC to treat it as belonging to the new tax year.

Fix: Run your final payroll of the year on or before 5th April and submit the FPS immediately.

Pitfall 3: Incorrect Holiday Pay Calculations

If employees receive rolled-up holiday pay or irregular hours, double-check your calculations.

Fix: Use HMRC's holiday pay calculator or consult your payroll software guidance.

Pitfall 4: Overlooking Directors' Pay

Directors have different payroll rules, especially if they're also employees.

Fix: Review directors' pay for the year to ensure NICs have been calculated correctly using the annual, not monthly, basis.

Get Year-End Right, Every Time

The March payroll run is your final chance to get things right before the books close on 2025/26. A little diligence now saves hours of correction later—and ensures your employees receive accurate documents and HMRC receives correct information.

But you don't have to do it alone. At Boobooks Accounting, we help UK employers navigate payroll with confidence. From monthly processing to year-end reporting, we ensure everything is accurate, compliant, and stress-free.

Close your payroll year confidently.

Book a free payroll review with our expert team today.