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At the end of the tax year, and by no later than 19 May, you must complete and send HM Revenue & Customs (HMRC) your Employer Annual Return. This comprises one form P35 as well as a form P14 summary for each employee for whom you have had to keep a form P11 or equivalent payroll record (either electronic or paper) during the tax year.
In order to complete your Employer Annual Return you'll first need to finalise the figures on each employee's P11 or equivalent record.
This guidance looks at both electronic and paper methods for finalising these payroll records, and highlights the benefits of using software now that almost all employers are required to file their annual return online.
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If your business is still using paper PAYE forms, HMRC strongly recommends moving to payroll software. There are many commercial payroll software packages available, as well as HMRC's free P11 Calculator within the Basic PAYE Tools package.
Payroll software will save you time and reduce the potential for error when finalising your end-of-year figures. As well as completing the calculations automatically for you, in most cases software will also allow you to file seamlessly online - a significant advantage now that almost all employers are required to file their Employer Annual Return online.
Read the section below to find out more and for links to further guidance.
If you manage your payroll using commercial software or HMRC's free P11 Calculator in the Basic PAYE Tools package, these will automatically add up the end-of-year payroll figures you need for your Employer Annual Return, saving you time and reducing the likelihood of error.
Using software also simplifies the process of filing the annual return online, which almost all employers must now do:
You'll need to check the features of your payroll software to confirm that automatic online filing is available to you. Our related guidance on the P11 Calculator (link below) explains in more detail which employers can use it to file online.
Bear in mind that to file your Employer Annual Return online you first need to register for HMRC's 'PAYE Online for employers' service. This is quick to do but you have to wait to receive an Activation Code (also known as Activation PIN) in the post before you can start filing online. This can take up to a week to arrive, so allow plenty of time to register before the annual return's 19 May deadline.
A set of Basic PAYE Tools are now available to download straight to your computer. In addition to the P11 Calculator, the tools include:
Download Basic PAYE Tools from the Business Link website (Opens new window)
Read about the different types of payroll software
Find out about using commercial software or HMRC's downloadable P11 Calculator
How to register for PAYE Online for employers
Filing your Employer Annual Return online
Find out which employers are exempt from end-of-year online filing
To finalise an employee's paper form P11 at the end of the tax year, you need to complete the following tasks:
Add up the entries in each of columns 1a, 1b, 1c, 1d, 1e and 1f and enter the total for each column in the corresponding column of the End of Year Summary section below, ready for transfer on to the form P14.
It is important to remember to round down the annual total of the earnings recorded in columns 1b, 1c and 1d to the nearest whole pound.
When completing column 1e you'll need to follow the steps below for each separate table letter per employee used:
Refer to the table at the foot of the form that allows for multiple entries where required.
If your employee is a member of any of the following listed pension schemes you must ensure you have entered the scheme contracted-out number in the boxes just to the right of the End of Year Summary section. The pension schemes are as follows:
Adding up Statutory Payments and Student Loan Deductions - columns
1g to 1k
Add up each of the entries in columns 1g, 1h, 1i, 1j and 1k and enter
the totals for each in the corresponding box at the bottom of those
columns.
Completing the section 'Pay and tax totals' boxes at the bottom of
form P11
The boxes you will need to complete will depend on your employees' circumstances.
Enter the final figures shown in columns 3 and 6 of the P11 at week
52 (or 53) or month 12 into the corresponding 'In this employment' and
'Total for year' boxes.
If a K code was used:
Complete the three boxes 'In previous employments', 'In this employment' and 'Total for year' as follows:
If PAYE was operated on a cumulative basis:
If PAYE was operated on a week 1/month 1 basis:
If a K code was operated on a cumulative basis:
If a K code was used on a week 1/month 1 basis:
Complete the 'In this employment' boxes only as follows:
If you operated a K code:
View a sample completed form P11
Once you have completed your P11 form, you are ready to complete your Employer Annual Return (form P35 and forms P14).
Please note that almost all employers are required to file their Employer Annual Return online rather than using paper forms. This applies even if you've been using paper P11s during the year.
In order to file online you'll first need to register for the 'PAYE Online for employers' service on the HMRC website. This is quick to do but you have to wait to receive an Activation Code (also known as Activation PIN) in the post before you can start filing online. This can take up to a week to arrive, so allow plenty of time to register before the annual return's 19 May deadline.
Follow the links below to find out more.
How to register for PAYE Online for employers
Filing your Employer Annual Return online
Find out which employers are exempt from end-of-year online filing
You can find quick answers to the most commonly asked questions about finishing the tax year by following the link below.
Finishing the tax year - frequently asked questions
If you still can't find the information you need, you can ask a question through our email query service.
