Annual payroll compliance

Produced by Tolley in association with

Employment Tax

Guidance

Annual payroll compliance is the natural conclusion of the payroll compliance cycle (see the Monthly payroll compliance guidance note), bringing the tax year to its formal close. This is only done when all payments have been made in the tax year and is relatively simple under real time information (RTI). This is because full payment submissions (FPS) will have been completed every time the payroll is run, and employer payment summary (EPS) submissions will have been submitted monthly. See the Real time information guidance note.

RTI compliance

FPS and EPS

The FPS submits cumulative values each time the payroll is processed, for example, information regarding pay, tax, NIC and student loans. The EPS is submitted monthly and, amongst other functions, submits details of amounts that can be reclaimed, for example, CIS deductions suffered and statutory payments (SMP, SAP etc.).

Therefore, to close one tax year in RTI requires the submission of an indicator to HMRC which confirms that this is the final submission of the tax year. This can be done in one of two ways using the

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