To make sure you're ready to process in the new tax year, complete the following tasks.

1. Check your version:

Before you can start processing in the new tax year, check your software version is v31.00.231 or above.

 NOTE: If you process an NHS pension scheme, ensure you install the background update to v31.00.236 and enter new NHS pension legislation.  

To check your version number:

1. Log in to Sage 50 Payroll as normal.
2. Click Help then click About.
3. Under Program Details check the Version Number.

If you need to update, you can find out how in our download and install the Sage 50 Payroll year end update article.

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2. Update the tax codes and clear the week 1 / month 1 flags:

For the 2025/2026 tax year, the personal allowance and emergency tax code remain the same at £12,570 and 1257L.

This means you won't need to update any employee tax codes unless informed by HMRC, but you do need to remove w1/m1 flags. Find out how to do this in our update your employees' tax codes article.

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3. Apply for the employment allowance:

You need to apply to claim the employment allowance at the start of each tax year:

 TIP: If you'd like to learn more, visit our employment allowance article.

1. Click Company, then click Settings.
2. Click the Apply for EA button.
3. From the State Aid drop-down menu, select one of the following options:
   • Applicable
   • Not Applicable

   If State Aid is applicable, select the relevant State Aid Sector.

4. Click Submit then click Continue.
5. Click Submit then click Submit.

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4. Claim small employers' relief (SER):

Your company normally qualifies for SER if your liability for national insurance (NI) contributions was £45,000 or less in the last complete tax year prior to the employee’s qualifying week, or in the case of adoption, the matching week.

You can learn more about SER in our handy guide, what is Small Employers' Relief (SER)?

1. Click Company then click Settings.
2. Select the Eligible for Small Employers' Relief check box.
3. Click OK.

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