Prepare for the new tax year

Prepare for the new tax year by reviewing and updating payroll in Xero to comply with regulations.

Review employee codes for the new tax year

We've updated payroll to comply with regulations for the new tax year. This includes:

  • Increasing tax codes ending in L, M and N.

  • Resetting any previous W1/M1 calculation methods to cumulative for the new tax year.

  • Carrying over all other authorised tax codes for you to review. For example, 1100L tax codes change to 1150L.

Use HMRC's P9X form for new tax codes (gov.uk website) to figure out which codes to change or carry forward for the new tax year.

Update employee tax codes

  1. Go to Payroll, and then click Employees.
  2. Click the employee you need to update.
  3. Click Taxes.
  4. Update Tax Code.
  5. Click Save.
If you have employees who are Scottish taxpayers, you'll add an S prefix to their tax code. For example, change 1100L to S1100L.

Update employee NI category

  1. Go to Payroll, and then click Employees.
  2. Click the employee you need to update
  3. Click Employment.
  4. Update NI category.
  5. Click Save.