PAYE Settlement

PAYE Settlement

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I will be completing a PAYE settlement for a client shortly that covers 8 employees on a joint BIK.  This is not seperable but is a chunky sum.

There are two complications:

1. For one employee is basic rate per their P60, but their share of the substantial BIK would push them into higher rate. Do I need to apportion the settlement and gross up at higher for some, and basic for the rest, or can I gross up the lot at basic rate?

 The (old) guidance just says "the marginal tax rates"

http://webarchive.nationalarchives.gov.uk/+/http://www.hmrc.gov.uk/guida...

and the .gov site is dumbed down too far to comment:

https://www.gov.uk/paye-settlement-agreements/overview

2. One basic rate employee and the BIK would not be enough to make them higher rate.  But they have other income that make them HR. I know this as I also act for this employee and file their personal tax return. But with my company PAYE clerk hat on, is is safe to ignore this 'extra' information for the settlement?  I think I am worrying too much. 

Also for extra credit and my understanding: 

3. Connected to (2)  if one was a company director on a low wage/high dividend strategy can we still just gross up at BR?  Seems unlikely or its a nice little loophole to get BIK's at basic rate, but again I cant see anything saying we have to do this. 

Replies (5)

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By ireallyshouldknowthisbut
10th Apr 2015 11:10

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Ah found the manual.

 http://www.hmrc.gov.uk/manuals/PSAmanualnew/Index.htm

Doesnt seem to help however.

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By Portia Nina Levin
25th Apr 2015 10:40

(No subject)

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By ireallyshouldknowthisbut
10th Apr 2015 14:31

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So you suggest simply offering the lower figure based on the P60 records, and leaving up to HMRC to contest?

Sounds like my normal cowboy approach, and there was me trying to understand the rules. 

 

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By Portia Nina Levin
25th Apr 2015 10:41

(No subject)

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By ireallyshouldknowthisbut
10th Apr 2015 16:35

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Thanks, that does help how to frame this with the client and HMRC.

 

 

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