End of tax year process

Finances/end-of-tax-year.md

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+# Background
+
+**DISCLAIMER: this guide is written with DWYL ltd in mind and is provided for information only. 
+You are responsible for ensuring your submissions to HMRC & Companies House are correct for your business**
+
+The UK tax year ends on 5th April. If you're an Employer running Payroll, you have certain obligations, including:
+
+* Submitting your final payroll of the year to HMRC
+* Updating your employee records
+* Updating your payroll software
+* Sending your employees a P60 form
+
+But good news: if you use Xero or a similar accounting system, this is all done for you!
+
+## Checklist
+
+* [ ] Run the last payroll of the tax year a couple of weeks early. This is so you can check for any discrepancies _before_ submitting 
+documents to HMRC (you can amend things afterwards, but obviously it's much trickier to do this after submission)
+* [ ] Ensure all payroll payments have been [properly reconciled](https://github.com/dwyl/hq/issues/449) [link to process doc TBC]
+* [ ] Now check the numbers - ensure that the total paid to employees plus the total paid to HMRC matches the amount leaving your bank account,
+and that there are no random transactions in the wrong place (e.g. put reconciled to wrong account)
+  * Run _gross to net_ payroll report `(reports > all reports > payroll > gross to net)`.
+  Select all employees and use the custom date range and change for the tax year e.g. 06/04/17 to 5/04/18
+  * Run _account transactions_ accounting report `(reports > all reports > accounting > account transactions)`.
+  Select accounts 814, 825, 826, 947, 477, 479, 482
+  * Run _P32_ report: `Xero > Reports > Payroll > P32 Employer Record`
+  * Check that `Gross Earnings` from _Gross to Net_ matches the sum of `Direct Wages` and `Salaries` in _Account Transactions_
+  * Check that the sum of `Employer pension` and `Employee pension` in _Gross to Net_ matches the `Pensions payable` amount in _Account transactions_ 
+  * Check that the `Employer pension` in _Gross to Net_ matches the `Pensions Costs` in _Acount transactions_
+  * Check the `Closing Liability` for `NIC payable` and `PAYE payable` in _Account Transactions_ match the figures in the last row
+  of the _P32 Summary_ for the `Gross NICs` and `Income Tax (PAYE)` columns
+  * Check the `PAYE total` in _Account Transactions_ matches the figures in P32 and `Gross to net`
+  * Check `NIC Payable` in _Account Transactions_ and `P32` matches the sum of the NIC columns (`EE NIC` & `ER NIC`) in `Gross to net`
+  * Check the `Grand Total` from the _P32 Summary_ (very bottom right) matches the sum of `PAYE total` and `NIC Payable` (from the previous two steps)
+  * Check the `Net Pay` amount in _Gross to Net_ matches `Wages Payable` in _Account transactions_
+  * Congratulations! You've just completed all the early checks - now you can process payroll as usual
+
+### After running the year's final payroll...
+* [ ] If anyone's tax codes need to change, HMRC will have sent you a formal letter explaining this - look out for form P9T/P9X. Add the new code to Xero
+  * `Xero > Payroll > Employees > Select employee > Taxes`
+  * Here you can see old tax codes and add new ones. 
+  * If you've not received anything from HMRC, Xero will update the tax codes for you automatically (but check anyway!)
+* [ ] Send P60 forms to all employees for their records: `Xero > Payroll > Select all employees > Hit "send P60"`
+* [ ] We're entitled to a £3k employment allowance which Xero processes automatically - so just double-check: `Xero > Settings > Payroll Settings` and the 
+Employment Allowance tickbox should be checked
+* [ ] Finally, check all employee details are correct in the Xero Payroll section - director status, student loans status, home addresses