Complete Year End Procedures (Payroll)
Unit summary
This unit is about producing payroll year-end returns and reports. You need to demonstrate that you use a computerised system to produce these. You also need to show that you can check the taxable value of benefits and expenses manually, for example, in response to queries or to check that the system has been set up correctly.The first learning outcome requires you to produce year-end returns and despatch them to employees and external agencies. This includes reconciling cumulative payroll totals to year-end balances to ensure that the information provided on returns will be accurate.In the second learning outcome you need to identify benefits and expenses that are subject to income tax and National Insurance contributions as well as the statutory returns applicable to each employee in respect of their benefits and expenses. This includes ensuring that dispensations are up-to-date.The final learning outcome requires you to calculate the taxable value of benefits and expenses and to report these to the HM Revenue and Customs using the statutory forms.Throughout the unit you need to show that you maintain confidentiality of employees’ personal details and that you meet organisational and statutory deadlines.
Unit details
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15 Business, Administration and Law
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15.1
Accounting and Finance
Assessment Methodology: Independent Assessment is mandatory for this unit
You must have knowledge and understanding of:
The Statutory Framework
1. Data Protection legislation (LOs 75.1, 75.2, 75.3)
2. HM Revenue and Customs Regulations in respect of:
• Income tax and National Insurance liability on pay, expenses and benefits (LOs 75.1, 75.2, 75.3)
• Income tax and National Insurance regulations relating to end of year reporting (LOs 75.1, 75.2, 75.3)
• The methods of submitting end of year returns (LOs 75.1, 75.2)
• Dispensations, extra statutory concessions, and HM Revenue and Customs Regulations settlement agreements and their impact on end of year reporting for Income tax and National Insurance purposes (LOs 75.2, 75.3)
The Organisation
3. Policies for dealing with expenses and benefits (LOs 75.2, 75.3)
4. Method of payment of expenses (LOs 75.2, 75.3)
5. Policies, practices and procedures for filing (LOs 75.1, 75.3)
6. Signatories and authorisations (LOs 75.1, 75.3)
7. Information flows within the organisation (LOs 75.1, 75.3)
8. Procedures for the security and confidentiality of information (LOs 75.1, 75.2, 75.3)
9. Sources of information for the resolution of discrepancies (LOs 75.1, 75.2, 75.3)
10. Principles of payroll accounting and the reconciliation of balances (LO 75.1)
Unit 75 of the AOSG Level 3 in Payroll Administration
FSSC has formally supported this unit (please see letter of support attached in the qualification need/support section)
| Learning Outcome |
Assessment Criteria |
| 75.1 Produce payroll year-end returns |
75.1.A Reconcile cumulative pay records to year-end balances
75.1.B Reconcile totals of income tax and National Insurance contributions deducted with payments made to the Collector of Taxes, taking into account recoverable sums
75.1.C Reconcile the total value of basic and supplementary pension contributions and Additional Voluntary Contributions from each employee with cumulative net taxable pay prior to completion of year-end returns to HM Revenue and Customs
75.1.D Complete form P35 year-end returns accurately
75.1.E Complete form P38A year-end returns accurately
75.1.F Complete forms P60/14 year-end returns accurately
75.1.G Complete non-statutory year end management reports accurately
75.1.H Despatch all statutory and non-statutory year end returns by the due dates on paper, or by magnetic, e-mail, internet or disc media, as required
75.1.I Distribute employee year-end information for employees by the applicable statutory date
75.1.J Prepare internal year-end summaries for accounting purposes in an accurate and timely manner |
| 75.2 Identify reportable benefits and expenses in the context of Income Tax and National Insurance |
75.2.A Identify the existence of an income tax and National Insurance liability for assets transferred
75.2.B Identify the existence of an income tax and National Insurance liability for payment of the employee’s own debts
75.2.C Identify the existence of an income tax and National Insurance liability for vouchers
75.2.D Identify the existence of an income tax and National Insurance liability for credit cards
75.2.E Identify the existence of an income tax and National Insurance liability for cars
75.2.F Identify the existence of an income tax and National Insurance liability for fuel for cars
75.2.G Identify the existence of an income tax and National Insurance liability for vans
75.2.H Identify the existence of an income tax and National Insurance liability for loans
75.2.I Identify the existence of an income tax and National Insurance liability for in-house benefits
75.2.J Identify the existence of an income tax and National Insurance liability for living accommodation
75.2.K Identify the existence of an income tax and National Insurance liability for travel and subsistence
75.2.L Identify the existence of an income tax and National Insurance liability for qualifying and non-qualifying relocation
75.2.M Identify the existence of an income tax and National Insurance liability for mobile telephones
75.2.N Identify the existence of an income tax and National Insurance liability for employee’s own telephone
75.2.O Identify the existence of an income tax and National Insurance liability for hotel expenses
75.2.P Identify the existence of an income tax and National Insurance liability for staff and client entertaining
75.2.Q Identify statutory exemptions from liability to income tax and national insurance
75.2.R Ensure that dispensations are up-to-date and are applicable to current organisational procedures
75.2.S Identify the relevant statutory return to be submitted for each employee
75.2.T Identify the correct method of calculating the income tax and National Insurance liability of benefits and expenses |
| 75.3 Produce reports of benefits |
75.3.A Correctly calculate the taxable benefit of assets transferred
75.3.B Correctly calculate the taxable benefit of payment of the employee’s own debts
75.3.C Correctly calculate the taxable benefit of vouchers
75.3.D Correctly calculate the taxable benefit of credit cards
75.3.E Correctly calculate the taxable benefit of cars
75.3.F Correctly calculate the taxable benefit of fuel for cars
75.3.G Correctly calculate the taxable benefit of vans
75.3.H Correctly calculate the taxable benefit of loans
75.3.I Correctly calculate the taxable benefit of in-house benefits
75.3.J Correctly calculate the taxable benefit of shares
75.3K Correctly calculate the taxable benefit of living accommodation
75.3.L Report the value of income taxable benefits accurately, taking into account non-reportable items
75.3M Report the value of income taxable expense of travel and subsistence accurately, taking into account non-reportable items
75.3.N Report the value of income taxable expense of qualifying and non-qualifying relocation accurately, taking into account non-reportable items
75.3.O Report the value of income taxable expense of mobile telephones accurately, taking into account non-reportable items
75.3.P Report the value of income taxable expense of employee’s own telephone accurately, taking into account non-reportable items
75.3.Q Report the value of income taxable expense of hotel expenses accurately, taking into account non-reportable items
75.3.R Report the value of income taxable expense of staff and client entertaining accurately, taking into account non-reportable items
75.3.S Calculate the Class 1A National Insurance liability accurately in accordance with statutory timescales
75.3.T Calculate the income tax and Class 1B National Insurance liability on benefits where the organisation has agreed to meet the liability
75.3.U Complete all form P11D year-end returns accurately and despatch by due date
75.3.V Complete all form P11D (b) year-end returns accurately and despatch by due date
75.3.W Complete all form P9D year-end returns accurately and despatch by due date
75.3.X Complete all non-statutory internal end of year reports accurately and despatch by due date
75.3.Y Ensure all year-end information for employees is made available by the applicable statutory date
75.3.Z Produce internal year-end summaries for management accounting purposes in an accurate and timely manner |