I have a new client who had overpaid an employee by some £4,000 back in 2006/07. The main payroll, P35s etc... were correct to what should have been paid in salary.
The errors has arisen on expense payments (essentially overpaid). The client doesn't want the money back from the employee but instead wants to pay the employee a sum through payroll now (in 08/09) so that the net pay cancels the overpayment showing in the purchase ledger (against their expenses PL account).
(The client & employee have no problem paying the appropriate PAYE/NICs)
Can anyone see any problems in doing this?
Many thanks,
Viv.
Viv
Replies (2)
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Thank you
for you response.
(and yes, the debt has been in the balance sheet since then),
(Also, I have noticed a grammatical error in my original post, "the errors has..." , which obviously should have been "the errors have..." oops)
No
It's not uncommon. It's under the £5k threshold which would have otherwise triggered a benefit in kind on a beneficial loan.
The 'overpayment' is presumably sitting as a debit in the balance sheet and wasn't charged to salaries in 06/07.