Payroll Year-End Checklist for UK Employers: Your Essential 2025 Wrap-Up Guide

As the final weeks of the 2025 tax year approach, that familiar year-end pressure begins to build for UK employers. Finalising your payroll year end isn't just another administrative task—it's a critical legal obligation with strict HMRC deadlines. Getting it right ensures you stay compliant, avoid unnecessary penalties, and set your business up for a smooth start to the 2026/27 tax year.

This practical checklist is designed to guide you step-by-step through the key actions and essential deadlines for the 2025 wrap-up, helping you navigate the process with confidence.

Your Core Payroll Year-End Tasks & Key Dates

1.Review and Verify Employee Data (Start Now)

Inaccurate data is the most common source of year-end errors. Take time now to check:

Personal Details: Ensure names, addresses, and National Insurance numbers are correct in your payroll software.

Starter and Leaver Information: Confirm the exact dates for any employee who joined or left your business during the tax year.

Tax Codes: Check that the latest tax codes from HMRC (like 1257L or any K-code) have been applied correctly. P9 notices from HMRC must be actioned immediately.

2.Report All Benefits and Expenses on a P11D

If you provide company cars, private medical insurance, or cover personal expenses, you must declare them.

• P11D Form: This form details the cash equivalent value of benefits provided to each employee/director.

• Deadline: Submit your P11D and P11D(b) forms to HMRC by 6 July 2026.

• Class 1A National Insurance: Remember, you must pay the employer's Class 1A NICs on the total value of benefits by 22 July 2026 (or 19 July if paying by cheque).

Simplified Option: If you have a Payrolling Benefits in Kind agreement with HMRC, you’ve already been reporting benefits through your monthly FPS. You must still provide employees with a statement of the benefits they received, but you will not need to submit P11Ds for those benefits.

3.Finalise and Submit Your Final FPS

Your Final Full Payment Submission for the year is your most important submission.

• What it does: It tells HMRC your final payroll figures for the year for each employee, including total pay, tax, and National Insurance deducted.

• The Deadline: On or before your employees' final payday of the tax year. You must also indicate this is your "Final Submission for Year" in your payroll software.

• Post-Year-End: After submitting your final FPS, you must submit an Employer Payment Summary (EPS) for the final tax month (6 April – 5 April) if you have anything to report (e.g., statutory recoveries like SMP).
  
  

4.Prepare and Issue Your P60 Forms

A P60 is a crucial document for your employees, summarising their total pay and deductions for the full tax year.

• Who gets one: You must provide a P60 to every employee who was on your payroll on the last day of the tax year (5 April 2026).

• Deadline: Provide the P60 to your employees by 31 May 2026.

• Format: This can be issued on paper or electronically, provided your employee agrees to receive it digitally.

5.Update Your Payroll Software for the New Tax Year

Before your first payroll run of the 2026/27 tax year, you must:

• Update your software to the latest version, which will include new tax codes, National Insurance thresholds, and statutory pay rates.

• Apply the new tax year settings to ensure the first pay run of the new year calculates everything correctly from the start.

Complete Your Final Payment to HMRC

Ensure all outstanding amounts for the 2025/26 tax year—including PAYE tax, National Insurance, Student Loan deductions, and the Construction Industry Scheme (CIS) deductions—are paid to HMRC in full by the deadline (typically 22 April 2026 for electronic payments).

Common Pitfalls to Avoid

• Missing the P11D Deadline: The July deadline often catches busy employers off guard. Start gathering benefit data early.

• Incorrect Student Loan Deductions: Ensure starters have provided a P45 or a Student Loan Start Notice (SL1). Check that leavers' final payments correctly account for any remaining loan balance for the year.

• Forgetting About Directors: Directors on an annual pay period often have specific payroll calculations, especially if they joined part-way through the year.
  

Streamline your year-end for 2026

Ensure a fully compliant 2025 payroll wrap-up