Employee leaving and wants P45 but client still owes them wages. Do we issue the P45 and then process any subsequent payment to them as if they were a new employee with starting and leaving date on the day they are paid the outstanding amount?
We are using Moneysoft Payroll Manager
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The payroll should show the amount due to be paid, not the amount actually paid if the employer is in arrears.
Agreed
... and you certainly would not re-start the employee and issue a further form P45 when he is paid an outstanding amount - the correct procedure would be to tax him on code 0T - but just run a payroll to calculate his final pay and issue form P45 based on that.
It has come up in the past that it is much easier if leaving employees are actually paid on the normal payday, but if your client wants to give the leaver his final pay and P45 before the normal payday for which you will be submitting the FPS, it will not matter.
Why didn't you say that in the first place?
I don't know if the client is going to have any money to pay the employee, so she may never get the money.
In the light of this new information, it seems that the employee is washing her hands of your client and just wants a form P45 to give to a new employer. In these circumstances, I would issue a P45 on the basis of what has actually been paid.
Asssuming, of course, that I was prepared to do any more work for an insolvent client ...