New client is a limited company director since the end of April 2015.
Her last day of employment with previous employer was 31/3/15. P45 issued.
In April 2015, the previous employer paid her a substantial PILON which is taxable in 2015-16. They used tax code 0T M1 so significant tax has been overpaid. The employer provided a "statement of earnings" but would not issue a further P45, despite obviously having to put the employee back on the payroll.
I am now trying to set up the payroll for her limited company - would like to pay a small salary of £486 per month from May through to March 2016 to keep up the client's NI record.
In doing so, I was hoping that the tax refund due from the April leaving payment would be generated through the payroll, but because the previous employer used tax code 0T M1, Moneysoft "greys out" the section where I can input the previous pay and tax details.
Would anyone have any suggestion of how I can get Moneysoft to recognise the April payment, and therefore generate the tax rebate through the future payroll submissions this year?
Replies (5)
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I'm not up to date with payroll legislation
I thought you only used an earlier tax code if you had a P45 from the same tax year, otherwise you use the tax code as suggested by the new starter checklist/P46. If this is their only employment then they should be given the standard tax code, shouldn't they?
You shouldn't even try
Late payments have their own set of rules.
She was not employed in April so you will not get a P45 but figures will have been reported.
You need to ring HMRC to ask for a cumulative code including previous pay and tax details to be issued
Careful what you wish for
Have you thought about where the cash to refund the overpayment will come from?