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Bonus not paid within 9 months

Bonus not paid within 9 months

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I am aware that accrued bonuses etc can only be allowed if paid within 9 months of the year end (the question of whether there is a constructive obligation at the year end is not relevant here). Any amounts not so paid are then disallowed.

If an accrual is also included of the associated employers' NI, should this also be disallowed if the bonus is not paid within 9 months of the year end?

I can't find anything in HMRC manuals or other guidance to specifically link the 2, but would appreciate the comments of others.

Peter Cane

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By pembo49
10th Jul 2009 14:16

I would have thought that as part of the bonus payment the er NIC would not be allowable either...never come across it in practice...

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By petersaxton
10th Jul 2009 15:27

If not included in the payroll then neither bonus or NI should b
As long as you include the bonus in the payroll it would still be ok to include the net pay as a creditor.

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By pawncob
12th Jul 2009 18:22

If the bonus wasn't paid then how can the ER contibution be due? Surely you don't accrue for items 12 months ahead, do you?

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By nogammonsinanundoubledgame
12th Jul 2009 23:00

To be clear ...
... I believe that the the point made by the original poster is that the bonus was indeed paid, albeit post year end, and at that time all PAYE obligations were met. Furthermore, the bonus, together with employer's NIC thereon, was accrued for at the balance sheet date. The only snag in the ointment is that the payment date, (and accounting for PAYE) took place more than 9 months following the balance sheet date. So there remains in point the question of what adjustments should be made to the corporation tax computations. There is no dispute that tax relief for the gross bonus should be deferred by a year. The question, as I understand it, is whether the same treatment applies to the employer's NIC thereon.

Sorry, I have not thought about it. I just naturally assumed that the treatment of the employer's NIC followed the treatment of the associated gross bonus, but I confess that it is a nice question.

With kind regards

Clint Westwood

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By Peter Cane
16th Jul 2009 12:29

Thanks to all
Thanks to everybody who's answered.

Unfortunately, Clint, the bonus has not yet been paid and is unlikely to be paid within the 9 months of the year end.

I can't find anything definitive to say the e'ers NI should be disallowed, but like everyone else, it seems to me to be a logical follow-on that if the bonus is disallowed, the NI should be too.

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