Reporting post P45 termination payments

Reporting post P45 termination payments

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I have a query in relation to the correct reporting procedures for Post P45 termination payments.......

I understand that in most cases where cash+benefits are more than £30,000 a report will need to be made to HMRC with tax based on 0T deducted from the items. Do you include the items on the payroll for admin purposes so that the amounts are included on a P14 form? IF not then would there be a difference in the P35 figures re tax due and tax paid?

Also what's the position if NI is due? does the report to HMRC include a breakdown for NIC?Is it easier to process the payment via payroll (if in the 20111/12 and employee made redundant last year) so that tax and NI is calculated based on the correct earnings periods? I know you can't issue another P45 but this would be in a new tax year....

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By Steve Knowles
19th Apr 2011 16:29

Tax/NI reporting

If tax and/or NI is due, the payment must be included on the P35 for the year in which it is paid. If not, you will have a discrepancy on the year end returns. As you have indicated, you would not provide another P45, but you would give a written statement of the payment to the employee, showing all deductions.

A post termination payment made after 5 April 2011 must be taxed on code 0T, and should be subject to the NI due for a weekly payment period.

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