A tax year end checklist for a stress-free first quarter

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The 2019/20 tax year end deadline is fast approaching for many businesses. This can be a stressful time for your company’s finance departments and payroll managers. The right tax year end checklist can help you simplify the process and avoid any administrative delays – or headaches.

To ensure a smooth tax year end, here are four payroll priorities to focus on.

  1. Follow the latest legislation

Legislation can change often and unexpectedly, depending on the country, which can leave companies on the back foot with authorities. You need to ensure that your payroll procedures are in line with any updates and that these are incorporated into your tax year end submission.

These legislative updates can vary. They could, for example, impact how tax is calculated for perks such as medical aid and travel allowances. Or, they could apply to certain tax brackets and restructure requirements for local and expat employees. In any event, failure to comply with the latest legislation will result in lost focus on core business, delays and penalties, a costly and stressful experience that is best avoided.

To ensure your business stays up to date with legislation you should invest in cloud accounting and payroll technology that has automatic updates to any legislative changes leaving the analysis and interpretation of legislative changes in the hands of the expert company, which in most instances should belong to the country tax body and also work with financial or payroll advisory firms.

If you do manage your compliance yourself, you can look the local government website of the country in which you operate for the most recent legal updates. However, it’s important to keep in mind that this information will not always be available, and even if it is you should weigh up the time factor of finding and interpreting the changes versus paying the software fees that already contain the required changes.

  1. Ensure all employee data is up to date

To achieve the best results with your tax year end checklist, it’s important to ensure that all your employee information is up to date.

During the year, make sure that employees update as much information themselves through employee self-service portals. Ensure that those who leave the company are processed timeously on your payroll system to avoid over or under payments that generally require additional interim runs or bank files which doubles up on time effort. Also, ensure that any remuneration changes are immediately indicated on the system for accurate pro rata calculations. This will reduce the amount of admin you have to do on a monthly basis as well as when the tax year end rolls around.

If you take the monthly checking approach along with using systems that do verifications on input of data, your tax year end procedures will not require you to double check that all employee tax has been calculated correctly and that all the required paperwork is in order. For example, expense receipts. Take advantage of online claims features to ensure that all the correct receipts have been allocated to the right employee and that, where applicable, they were refunded appropriately.

  1. Calculate employee bonuses

Also remember – if you reward employees with bonuses, these are taxed differently in various countries depending on when they are paid and their regularity. Ensure that they are filed correctly and that the right tax amount is subtracted.

  1. Store documents

Once your tax year end submission has been completed and sent through, keep all your financial documents: invoices, payslips and expense receipts, clearly archived and securely stored. Should your business be audited by the local government or tax authority at a later stage, you’ll then be able to access everything you need easily.

The end of the tax year doesn’t have to be stressful for payroll managers. Use this tax year end checklist to make sure you don’t miss anything important, and that your tax data is ready to be submitted to the relevant authorities on time.

If you’d like to make your tax year end even more stress-free, let us know. Payroll compliance is our speciality.

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