Payroll question

Payroll question

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One of my clients has just informed me of their plans with regard a long serving employee of theirs.

He is emigrating to Dubai in November – lock stock and barrel (full of oil). My client has agreed as a thankyou for long service (and because he will continue to be contactable remotely to help on matters on the software he has managed over the years and help the handover) to carry on paying him until 31 March 2015 his normal salary (£36k pa/£3k per month) so he will remain an employee of my client

However, as I understand, the income he will earn from 1st November will not be subject to PAYE as long as he has filled in the relevant forms etc and got the P85 done correctly. He may have to wait for any refund etc. However – my question is from my clients perspective – i.e. – will they have to wait for HMRC to issue the individual with a suitable tax code and therefore continue taxing him using 1000L for now – and does anyone have any experience on how long HMRC are likely to take to issue suitable code so I can at least advise

Thanks in advance for any help

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By David Heaton
08th Oct 2014 18:13

Apply now for the NT code

The employer cannot apply the expected NT code without HMRC authority.  If the employee returns within the next tax year so that he never breaks residence, so never has a split year, the employer will be responsible for any under-deduction caused by using an unauthorised NT code.

Apply now - the P85 explicitly refers to 'the date you intend to leave', so it can be submitted in advance of departure.  You should get the code before the November salary payment is due.  The refund of tax in respect of unused personal allowance and basic rate band will probably have to wait until the end of the tax year.

If you want to give HMRC extra time to issue the NT, agree with the employee now that he'll be paid on, say, 31 January for the work over the first three months of tele-support, so no PAYE is deducted before the NT is received.

Watch the NIC position.  As the employee is emigrating, the 52-week rule doesn't apply, so no NICs should be payable from 1 November - use Table X as the NI category.

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