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4. Get ready for the new tax year

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Summary

How to get ready for the 2024/2025 tax year in Sage 50 Payroll.

Description

This is the final stage of completing payroll year end. See all four stages here >

Before you process in the new tax year, follow the steps below to ensure your software is ready.

TIP: Take a look at our handy checklist to help you along the way. Get ready for the new tax year - checklist >

Resolution

1. Check you're using the correct version

Before you can start processing in the new tax year, you must have installed the year end update, v30.00.226.

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 guide.

2. Update your NI rates

The Spring Budget 2024 announcement included a reduction of the main rate of employee National Insurance for the 2024/25 tax year.

You must update your NI rates in Sage 50 Payroll v30, before you process a 2024/25 payroll. To find out how, visit our how to apply the Spring Budget 2024 NI changes guide.

3. Update your employees' tax codes

For the 2024/25 tax year, the personal allowance and emergency tax code remain the same at £12,570 and 1257L. This means you don't need to change your employees' tax codes unless informed by HMRC.

You do however need to remove the week 1 / month 1 flag on any employees' tax codes before processing in the new tax year. Update your employees' tax codes >

4. Small employers' relief

If you're eligible for Small Employers' Relief (SER), you need to set your software to calculate and claim it.

Your software only calculates SER if you enable it before you update records. What is Small Employers' Relief? >

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

5. Apply for Employment Allowance

TIP: Make sure your process date is set to 06/04/2024 before completing this. 

Employment Allowance (EA) allows eligible employers to reduce their annual Employers National Insurance liability by up to £5,000. 

You can easily apply to HMRC to claim EA and keep track of how much you've claimed through your software. HMRC started accepting 2024/25 applications from 6 March 2024.

To find out more, visit our employment allowance guide.

6. Pensions module

If you use the pensions module, follow the steps below.

Automatic enrolment phasing

When you process the first period of the new tax year, you're prompted to check your pension contribution rates are correct.

Find out how in our Automatic enrolment phasing - update the percentages using the Pensions Module guide.

Pensions Data Exchange

If you use Pensions Data Exchange (PDX) to send pension data to your provider, there are some additional steps to complete at the start of the tax year. Prepare Pensions Data Exchange for the new tax year >

New legislation for the 2024/2025 tax year

There are a few changes to payroll legislation in the new tax year, including a change to the National Minimum Wage from 1 April.

If you'd like to see the new legislation, visit our payroll legislation for the 2024/2025 tax year guide.