This article will outline the 2020/21 end of year procedure and provide you with a summary of the changes which are being introduced for 2021/22.
Do I need a week 53?
A week 53 takes place when your payslip date falls on Monday 5th April 2021. This applies to weekly, fortnightly and four weekly paid employees. If your payslip date (the date in which your employees receive their pay) does not fall on this day then no week 53 is required. Upon completing week 52 you can migrate your data to 2021/22 and proceed to pay week 1.
The NI calculation for week 53 will be accomplished exactly the same as every other pay period. The only change will be for tax calculations were the software will automatically alter the employees tax to a week 1/month 1 tax basis.
Qtac will automatically include the ‘Final Submission Indicator’ within your final (W52/W53/M12) FPS submission.
Simply put, all you need to do at the end of the year is:
- Pay your final period (W52/W53/M12)
- Submit FPS (Full Payment Submission)
Any employee who is employed by your business on the 6th of April must receive a P60. If an employee has left prior to the 6th April they will not receive a P60.
A P60 can be produced from the Qtac software from “Reports > Year End > Electronic P60’s”. If you have the company name selected the software will run the P60’s for the whole company. For more information on P60's please click here.
Installing and Migrating the New Software
At the end of the tax year Qtac produces a new version of the payroll software. You are able to migrate the data from 2020/21 version of the software into the 2021/22 software once your final pay period has been completed. For more information on this process see Migrate last years data.
Changes Introduced in 2021/22
The Qtac 2021/22 payroll software introduces new changes for the tax year.
The scheme – which pays 80% of employees’ wages for the hours they cannot work will be extended until the end of September. Employers will be expected to pay 10% towards the hours their staff do not work in July, increasing to 20% in August and September.
Off Payroll Worker
The changes to the off-payroll rules were due to come into effect on 6th April 2020 but this was delayed until April 2021 as part of the government’s Covid-19 economic response package.
Off-payroll working rules, known as IR35, were introduced in 2000 to ensure that someone working as an employee, but through their own limited company, pays broadly the same tax as someone employed directly.
The reforms, announced in the 2018 Budget, are designed to tackle non-compliance with the off-payroll working rules. The reforms make medium and large organisations in the private and third sectors responsible for determining the tax status of contractors and ensuring that the right employment taxes are paid. The reforms have previously been implemented in the public sector.
Detailed guidance on the reforms has been published by HMRC
Scottish Student Loans (SL4)
From April 2021 a student loan plan type 4 will be introduced to serve the increase in student loan earnings threshold within Scotland. The threshold will be set at £25,000 with a repayment percentage of 9% on any earnings above the threshold.
Qtac 2021/2022 will be updated to allow an employee to have a type 4 student loan set, with deductions being reported on the Full Payment Submission (FPS) to HMRC.
HMRC will be releasing an update to the starter checklist and SL1 documents, however, no amendments will be required to the P45 or P60 documents.
Discontinuation of Automated Reports v1
In 2015 a new reporting feature was added to the Qtac product. Automated Reports v2 brought new functionality, improved error reporting and better stability to the already popular Automated Reports functionality.
From April 2021, Automated Reports v1 will no longer be available and we encourage users to migrate their reporting to version 2 before the new tax year.
Information on how to configure Automated Reports v2 can be found here
For more information on the rates and thresholds for the 2021/2022 tax year click here.