Introduction
The following information is to help you ensure that your payroll is kept up to date each month in readiness for finishing the Tax Year. It also gives useful advice on what may cause issues and how to avoid them.
Tax Reference Reconciliation Summary
The tax reference reconciliation summary outlines the values that are reported to HMRC on the regular Real Time Information (RTI) Full Payment Submission (FPS) and associated with your submission of the monthly Employer Payment Submission (EPS).
These should balance to your employer PAYE online dashboard account.
The first part shows the Income Tax, Student Loan and Postgraduate Loan Amounts which are included in the PAYE tax amounts.
The next section shows the amounts which relate to Class 1 National Insurance Contributions, Class 1A for Termination Payment and Sporting testimonials and IR35 Class 1 National Insurance for any deemed employees.
Also whether the employer is claiming the employment allowance (which is requested by submission of the Employer Payment Summary.
This next section outlines the statutory payments, recovery and any compensation if the employer qualifies.
This section outlines the recorded amounts of secondary NI Pay Bill and the associated calculation of the Apprenticeship Levy for this payroll.
The last section details the amounts which require payment over to HMRC along with the totals to-date and the values required to be reported on the EPS for App Levy.
It is best practice to reconcile your payroll reconciliation summary by checking that the Brought Forward values for the current period equals the Carried Forward values from the prior period. Also, that these values balance with your HMRC employer PAYE online account amounts expected for the tax year. These should align with the actual FPS and EPS submission values. However, the FPS does not report any individual with a tax basis settings of X (eXclude from reporting).
Any entries in the adjustment column need to be verified. Values will show in the adjustment column if you have transferred employees or updated year-to-date values.
Amendments may also be applied using Previous/Manual Adjustment.
Check the Payment Due to HMRC balances to the amounts paid over to HMRC each month.
Also check pay reporting action required from the:
- Exception report (each period)
- End of Year Exceptions report
- End of Year Reconciliation
Statutory Requirements for RTI Submission
Since 2013, all Employers must file data with HM Revenue and Customs (HMRC) through Real Time Information (RTI). Employers are obliged to file the Employer Payment Summary (EPS) final declaration electronically by the latest 19th April 2025: using either the SD Worx EPS service, the SD Worx EPS reporting tool, HMRC Basic PAYE Tools, or some other electronic means of the employers choice.
SD Worx does not file the EPS final declaration as an assumption as this declaration is by the employer who is confirming completion of the tax year to HMRC.
Full Payment submission (FPS) are submission files of change only. At Tax Year End the Year To Date FPS correction submission only contains records for employees who have amendments applied to their records and will not report any with a tax basis of X (eXclude).
The Final Update Procedure
Introduction
This section:
- Details the timing deadlines.
- Indicates when the final reports will be available and
- Shows the latest date by which customers can apply amendment adjustment data.
You are reminded that data can be applied at any time in advance of these deadlines.
Timing deadlines
You have the flexibility to manually commit your Tax Year End any time commencing from 1st April and up to 15:00 on the day of your scheduled Auto Commit Date already communicated to you as part of your processing schedule.
Those providing paper amendments for End of Year update must send all data at least one week prior to the scheduled processing date.
Where these dates fall on a weekend, the processing point will revert to the Monday following.
Ensuring accurate HMRC data and Full Payment Submission (FPS)
National Insurance
If any NI amounts are in error – please refer to Appendix 1 for further information.
Correcting errors during the Tax Year update activity – as a last resort errors may be corrected during update activity simply by using the normal National Insurance totals-to-date payroll items. If the employee is a Director, please ensure the appropriate payroll items are used that relate to directors and not those for employees.
Note: If NI Contributions are present without the relevant NIC Earnings fields this may cause your FPS submission to be rejected by HMRC.
Class 1A Contributions on Benefits in Kind: No Class 1A is reported on RTI submissions in relation to benefits in kind as they are part of the P11D and P11D(b) process. Any attempt to report Class 1A through the payroll will cause NI ratio failures. HMRC are proposing changed to expand real time reporting of Class 1A on benefits for the 2026/2027 tax year and onwards.
Class 1A contributions on termination payments and sporting testimonials in real time: Only Class 1A for terminations and sporting testimonials are reported. These values are automatically applied by setting the correct indciators against the relevant pay element.
Employee Records zeroised or excluded from Tax Year End
- Negative Income Tax or statutory payments – Please note that HMRC will not accept negative values for certain reporting data items. Check for any negative year to date Income Tax and other values. Employees with negative tax year-to-date values will be set to zero on the FPS submission.
- Employee Exclusions – The Exceptions Report produced each pay period will show any employee whose tax basis is ‘X’ for eXclude from HMRC reporting. This means that they are not included on the FPS submission. It is good practice to check for accidental entry of tax basis of ‘X’. Remember it is an easy mistake to make as someone on a Month 1 / Week 1 basis on the P45 is indicated with an ‘X’, the correct entry value is ‘1’. To include these employees on FPS and produce a P60 remove the ‘X’ on your final update by applying either ‘0’ or ‘1’.
Mandatory Details
In the case of titled employees who do not use forenames or initials, it is recommenedthat the initials field is used to input any titles (such as LORD or DAME etc.).
During the Final Update Procedure
This section deals with aspects of the final update procedure.
Corrections
Enter any required changes into the final update (Tax Year End) facility prior to your deadline.
Parameter Changes
Any changes to your parameters MUST be made within or before the last run of the tax year. Changes such as company address, new or changes to allowance, deductions and pensions will not be sucessfully processed in a TYE process or commit.
Data Items
For a list of items please refer to Appendix 1
New Starter and Leavers Details
Any new starters or leavers that missed your final payroll processing of the Tax Year must be added to your Final Update Procedure (No P45 will be produced). Also ensure this information is included in the new tax year and include data item E105 # for new starters and E110 # for leavers to prevent them being a duplicate report to HMRC who may inadvertently open a second PAYE record.
Ad-hoc Payroll Adjustments
Adjustments required for an individual employee can be processed using the TYE Payroll Adjustment screen. No payslip will be produced in the tax year end update process.
Amendments to Year-to-date totals
See Appendix 1
Production of payments
The tax year end update process is not a payment activity. It does not calculate any automatic payments, nor does it create any bank credits (BACS file). You will not be able to process this time values except as part of a payroll adjustment. The final update procedure will not produce any online or printed payslips or P45s.
Results generated
SD Worx Online Reporting
- Input Error for EOY
- Amendment for EOY
- Exceptions by Payroll for EOY
- Financial Summary
- P35 Data
- Reconciliation Summary for EOY
- Tax Year End Reconciliation
- P60 Copy data
Printed (Optional)
- P60s
P60/eP60
P60 is the certificate of pay and tax deducted for employees. This can be a paper P60 form or an eP60 available via Online Payroll Documents (where it has been agreed that the employee is to receive their P60 electronically). The P60 is required to conform to a format that is approved by HMRC.
To prevent P60s printing, data item E066 with a value of Y will need to be entered, (be aware that if this is entered at TYE it will not be carried forward into the new Tax Year).
Format
SD Worx can provide P60s either electronically (eP60) or as a Z-Fold postable document (see below for price). Most of the information contained on the P60 is found on the P35 (CS) Substitute, the Gross Earnings for NI details and Pay Journal entries.
Employers have the option of providing employees with an official eP60 via Online Payroll Documents where employees have agreed, in which case there is no requirement for the employer to provide a paper copy. If you have employee self service your employees have access to their P60 data and eP60.
Check that SD Worx hold your correct employer P60 addresses which will appear on any P60 or eP60.
Leavers prior to 5th April
In line with HMRC policy, P60s need only be provided for employees who are employed on the 5th April of each year. Leavers are advised of their appropriate values by the issue of a P45 Leaver Statement.
If there are any leavers on file without a valid date of leaving, then SD Worx will produce a P60 for these employees as the date of leaving cannot be determined.
Z-fold security sealed P60 pricing
| Number of Employees | Charge | Number of Employees | Charge |
| 0-50 | £268.10 | 401-450 | £766.80 |
| 51-100 | £322.70 | 451-500 | £831.30 |
| 101-150 | £389.60 | 501-550 | £890.90 |
| 151-200 | £449.20 | 551-600 | £952.90 |
| 201-250 | £518.70 | 601-650 | £1,022.40 |
| 251-300 | £575.80 | 651-700 | £1,072.00 |
| 301-350 | £640.20 | 701-750 | £1,146.40 |
| 351-400 | £704.70 | 751+ | £1.60 per employee (min £1,146.40) |
*Note- Postage/Delivery is additional at £10.50 or £42.00 by courier
Checking final outputs
Check the Exception reporting messages as they indicate errors and warnings which may prevent accurate reporting to HMRC. Also check the following do not contain any entries that should have been actioned:
- The End of Year Exceptions
- The End of Year Reconciliation
Frequently Asked Questions
Why would the tax I have paid over to HMRC not agree with the values shown on my reports or the Employer PAYE online account?
Some of the reasons:
- Mid period manual payments or adjustment have not been applied to the SD Worx Payroll.
- You did not pay over the amounts due on the reconciliation summary (including adjustments). Generally, the amount you pay over each period should be the year-to-date value shown on the Reconciliation Summary, LESS the amount previously paid.
- The EPS may not have been filed with the correct values declaring Statutory Payment reclaim values.
- HMRC have created inadvertent duplicate records on the HMRC systems in error (change of name, pay frequency, etc.).
- Employees transferred from one employee record to another have caused duplication of records on HMRC systems.
Why does the P35 Data report not agree with my Financial Summary?
If you have adjusted values in the Tax Year End update, please check that you are looking at the Financial Summary produced from Tax Year End as opposed to the final payroll run.
The End of Year Reconciliation Report may list additional reconciliation values that have been altered. Some employees may have missing or incomplete data; look at the End of Year Exception Report to see if there are any exclusion markers (T010 X), which may have removed specified employees from the return.
Why do Nl-able earnings appear to be incorrect?
Are any of the below statements applicable?
- If the individual has been on more than one NI letter in the Tax Year, you need to ensure that when the letter changed the correct earnings values were used.
- If you have amended any of the totals to-date values throughout the year, you must check you have used the correct payroll item.
- If you made Ad-hoc Payroll Adjustments (or manual payments), you need to update the NI-able earnings fields.
- Directors’ NI is different, and the calculations work automatically from single earnings value (associated with data item N288) as Directors NICs is accounted on an annualised basis.
Why have data items N108 and N018 not been actioned?
If the individual is a director subject to directors NICs, these data items are not correct. See Appendix 1, for a listing of data items to use.
Why are some of my P60s missing?
A P60 is not produced if an employee has been excluded by using payroll item:
- T010 X or where E066 has been set for eP60 only.
- P60s are not produced for employees who have a leaving date prior to 5th April 2025.
What payroll data item should I use to update fiscal totals for TYE?
New revised guidance for SD Worx Payroll is available to guide you through the operation of National Insurance
Using the data items in Appendix 1 will overwrite the YTD figures for employees.
Can I have duplicate set of P60s?
Online Reporting and HRe Payroll offer as standard the ability to print one-off copies of P60 data. Equally employees with access to Online Payroll Documents can print a copy of the eP60. On that basis the need for duplicate forms P60 is not required.
Commencement of the New Tax Year
Changes entered into Tax Year End
Data entered on the Tax Year End adjustment is used to correct the Tax Year End submission to HMRC. It is not used to update the normal payroll data.
If you input any of the following details remember you must input the same details again on your first payroll of the new Tax Year:
- Address amendments you may have used to update details for P60s.
- New starters but excluding totals to-date. Also enter the E105 #.
- Leavers also enter the E110 #.
- Any permanent data for current employees e.g. surname, title, N.I. number/letter, tax code etc.
Tax Codes
Current employees Tax Codes
All employees’ tax codes will revert to a cumulative basis automatically. Any uplifts of tax codes by legislation (P9X) will take place automatically.
RTI (ElEx) Tax Codes
For users of the SD Worx Electronic Exchange service and the SD Worx RTI ElEx service, tax code changes (P6, P6B and P9) will be automatically applied to employees where the Payroll ID matches those expected. Where a satisfactory match is not found, then the individual tax code change will be sent to you via email to be applied as if you had received the official paper document.
To be able to receive automated electronic P9s through the SD Worx Electronic Exchange or SD Worx RTI ElEx service, you must either already be in receipt of P6 tax codes or the appropriate registrations must have been completed via SD Worx and HMRC by 22nd January 2025.
Form P9 Tax Code Changes
Ensure any new tax codes you receive from HMRC are implemented on your first payroll for the new Tax Year i.e. tax week/month 1, and not via the Tax Year End adjustment screens.
Note: Any statutory tax code changes which have been automatically uplifted by SD Worx, will show on the employee’s local held record following the closed Month 1/Week 1 payroll. Any changes will however be reflected in the open period payslips – Please note that for the new tax year 2025/2026 there is no requirement for automated tax code uplift.
New Starter Tax Codes
Please see the update guidance on Legislation and the RTI user guidance here showing guidance on how to operate a new starter with a P45 and the New Starter Checklist requirements, especially in regard to student loan deductions.
Note: If you receive a starter P45 indicating a tax basis X then you must enter T010 1 not T010 X as X indicates to SD Worx Payroll an employee exclusion from your RTI Submissions.
Order in which to update Tax Codes
Tax code changes that are not dated or do not have matching sequencing dates are applied as follows:
- Uplift of tax codes by legislation
- Individual P6/P9 changes submitted in payroll data
- Tax code changes via Electronic Exchange
- P45s/New Starter Checklists
Pension Schemes
Each year it is essential that you check all your pension schemes’ parameters prior to processing your first pay period in the new tax year. It is vital that you confirm with the pension providers and trustees that the current parameters are accurate.
National Insurance
All legislation changes are dealt with automatically, however please bear in mind that you may have employees on NI category J by means of a CA2700 certificate. You will need to have their NI Table letter reset to A respectively if a new certificate is not sent in time for the first processing run.
Appendix 1 – Data Code Tables
National Insurance
National Insurance guidance for SD Worx Payroll is available
| Data Code | Description | Data Code | Description |
| N018 | Employee National Insurance Contributions To Date | N102 | Employer’s NI To Date Decrease |
| N108 | Employer National Insurance Contributions To Date | N161/N171/N191 | Positive Adjustment to Each of the 3 earnings fields |
| N168 | Overwrite NI-able Earnings To Date Up To LEL | N288 | Director’s Gross Earnings To Date |
| N178 | Overwrite NI-able Earnings to Date Between LEL and PT | N368 | Overwrite Director’s Earnings To Date Up To LEL |
| N188 | Overwrite NI-able Earnings to Date Between PT and UEL | N378 | Overwrite Director’s Earnings To Date Between LEL and PT |
| N228 | Overwrite NI-able Earnings to date above the UEL | N388 | Overwrite Director’s Earnings To Date Between PT and UEL |
| N051 | Pre –Determined NI Contribution | N428 | Overwrite Director’s Earnings to Date over UEL |
| N052 | Pre- Determined NI Refund | N251 | Director’s Pre Determined NI Contribution |
| N011 | Employee’s NI To Date Increase | N252 | Director’s Pre Determined NI Refund |
| N012 | Employee’s NI To Date Decrease | N218 | Director’s NI To Date |
| N101 | Employer’s NI To Date Increase | N908 | Paybill Earnings To Date |
Note: If an entry of N051/N052/N251/N252 is made then you must input the relevant Earnings Bands Fields using either N168/N178/N188/N228 or N161/N171/N181/N191/N221 for ordinary employees or N368/N378/N388/N429 for Directors
Payroll item required for New Starter on a Tax Year End Amendment Run
| Data Code | Description | Data Code | Description |
| E001 | ‘S’ Status Marker | E041 | Gender |
| E002 | Initials | E049 | Department |
| E003 | Title | E044 | Paygroup |
| E004 | Forenames (for printing of P60) | E080 | Date of Birth |
| E005 | Cost Code | E081 | Date of Start |
| E006 | Surname | T000 | Tax Code |
| E010 | Marital Status | T010 | Tax Basis (If applicable) |
| E021 | Address Line 1 (Optional) | T050 | Taxable Pay Previous Employment (P45) (If applicable) |
| E022 | Address Line 2 (Optional) | T060 | Tax Paid Previous Employment (P45) (If applicable) |
| E023 | Address Line 3 (Optional) | N001 | NI Letter |
| E024 | Address Line 4 (Optional) | N003 | NI Number (if not known enter ‘NONE’) |
| E025 | Address Line 5 (Optional) | 0010 | Basic Pay (Optional) |
| E026 | Address Line 6 (Optional) |
You will also need to put through all the Year to Date figures. This can be completed using the codes below which will overwrite the YTD figures for that employee. But, to show this change correctly on your reconciliation summary for the run, you should enter as a TYE manual adjustment and let the system calculate the YTD figures for you.
| Data Code | Description | Data Code | Description |
| N018 | Employees NI contributions To Date | N188 | Earnings PT and UEL To Date |
| N108 | Employers NI contributions To Date | N228 | Earnings above the UEL To Date |
| N168 | Earnings Up To LEL To Date | T078 | Taxable Pay YTD |
| N178 | Earnings LEL To PT To Date | T088 | Tax Paid YTD |
| N908 | Paybill Earnings To Date |
Any new starters or permanent data input on the Tax Year End run must be re-input again in the first process of the new Tax Year.
Tax/Pension Payroll items
| Data Code | Description | Data Code | Description |
| T000 | Tax Code | T088 | Total Tax Paid To Date |
| T010 | Tax Code Basis | P018 | Employee contribution Total This Tax Year |
| T050 | Taxable Pay in Previous Employment | P019 | Employee contribution Total This Pension Period |
| T060 | Tax in Previous Employment | P119 | Employer Contribution Total This Pension Period |
| T078 | Total Taxable To Date | P038 | Pensionable Pay To Date |
Statutory Payments
| Description | Data Code | Description | Data Code |
| M708 | SMP Total Paid in Tax Year | M768 | ShPPA Total Paid in Tax Year |
| M718 | SPP Total Paid in Tax Year | M728 | SAP Total Paid in Tax Year |
| M738 | SPPA Total Paid in Tax Year | M778 | SPBP Total Paid in Tax Year |
| M758 | ShPP Total Paid in Tax Year | C068 | Student Loan Total Paid in Tax Year |
