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Holiday pay for deceased employee

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Hi all

Accountant prepares payroll for one of my bookkeeping clients. 

One of employees had been on sick leave for a couple of months and sadly passed away at end of March.  SSP fully paid up to date and P60 issued at tax year end.

Business owner asked by family member if any holiday pay was due - 10.4 hours is owing so requested this be run through payroll.  Response was that P45 had been issued and HMRC advised of death and has been suggested that the hours be paid and as its a new tax year and he will be below income threshold for tax/NI that just a letter be issued on letterhead stating holiday pay due and pay is gross.   The P45 has not been provided to the company.

I understand that this chap was in receipt of income from other sources (possibly 2 x pensions, although its not fully clear, I just know there were issues with tax coding each year).

My understanding is that a further payment can still be made but using an OT tax code so this is run properly through RTI.

The employee is on just above minimum wage so taxing on OT basis seems a bit churlish, for the widow to eventually get back via a refund, but was just pondering if there would be any implications on the company for opting for issuing the letter rather than via RTI in the event of an inspection?

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By Peter Kilvington
24th Apr 2019 10:55

We are talking less than £100, if you ever have an inspection you can explain the circumstances. I really do not expect that any consequences would come from you just issuing a letter and a cheque. Not even sure you can resurrect an employee and make a payment.

If you are worried ring the employer helpline.

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By Wanderer
24th Apr 2019 11:00

This is what HMRC say:-
https://www.gov.uk/what-to-do-when-an-employee-dies/paying-employee-died
Personally I'd probably just follow the advice that Peter gives above.

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By JoF
24th Apr 2019 12:47

Thank you both.

I had seen the link that Wanderer added and its an option Ive used in the past for additional amounts, albeit that time the mount was higher than this.

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