Employee didn't get holiday pay, how to work out nic/tax?

Did not file through PAYE employee holiday pay

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Hello there, thank you in advance for taking the time to read

I couldn't afford to pay an employee holiday period in July this year, so I told her that I'd pay her eventually. 
I have moved my payroll from my book-keeper friend, and am doing it myself now with Moneysoft Payroll Manager.
Say for example she got paid £180.00 this week, her NICs would be £3.00, but if I add in £180.00 holiday pay (for July), her NICs jump to £24.60.

Should I just process this as is, deduct the £24.60 from her pay, and tell her that she will get a refund from the Gov at the end of the tax year?

(Not sure I like the new design of this forum by the way)

Thanks again

Replies (5)

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Scalloway Castle
By scalloway
27th Aug 2016 19:58

I am not aware of any procedure for reclaiming NI at the end of the year. Official HMRC advice is here.

https://www.gov.uk/guidance/paying-an-employee-in-advance-for-holidays-o...

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By legerman
27th Aug 2016 22:23

Unfortunately, as you have found, paying the employee £360 this week has effected the NI. There is no way to claim it back as it is based on each payroll, not cumulative like tax. I would suggest paying the employee an extra £28 to cover the shortfall.

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By Sandnickel
28th Aug 2016 09:08

So your employee was entitled to £180 in July but you didn't pay it? Does that mean the employee is a week down (in effect) in July? If so, I would amend the offending week in July and then there will be no nic issue.

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Routemaster image
By tom123
28th Aug 2016 09:17

You need to amend the payroll for the week concerned.

Not sure I would be too impressed to be your 'employee' though if this ended being more than a one off.

There are no 'refunds' for NI as it is calculated on a period by period basis.

Any income tax is cumulative though,

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RLI
By lionofludesch
28th Aug 2016 11:26

You've made a right mess of this. I'm taking it that you entered no pay or tax in that week back in July ? This isn't a case where the employee says "I don't want my holidays, I'd rather have the cash" ? That would, of course, raise further points about minimum holidays.

On that assumption, what's really happened is she earned the money in July and that's when she should have been charged tax and NI. You owed her, at that point, the net wage, not the obligation to pay her gross wage at a later time.

Go back and enter the £180 in the right period.

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