IR35 Deemed payment and payroll software

Where do I include this on my payroll software

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Hi all, hope you can help.

First time running a deemed payment for a client inside IR35 - this bit is all fine but how do I actually submit the deemed payment to HMRC?

From everything I have read at .gov I need to include it on the final FPS but there is no where to include it in my payroll softwares FPS report. 

I've spoken to the software provider (12Pay) and they simply stated we do not support IR35 deemed payments and there is nowhere on the FPS you can enter it. I don't think the guy really understood what I was asking.

Do I simply add it to the month 12 payslip?

If I do then do I add it in addition to the £671 that the client was going to get that month i.e. deemed payment worked out on basis of 12 months salary of £671 drawn so I enter the deemed payment plus £671 for month 12 OR do I perform the deemed payment calculation based on 11 months of £671 and then just enter the deemed payment amount alone in month 12 of the payroll? Or does it make no difference either way.

I'm sure it is actually a simple solution/operation and I'm over thinking it but not having done it before I am slightly confused as to where to include it.

Any help, guidance, advice or experience anyone can give would be much appreciated.

Thank you. 

Replies (2)

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Euan's picture
By Euan MacLennan
29th Mar 2017 17:51

There is no facility in any payroll software to enter "deemed" payments nor do you want to have any "deemed" payments in the company accounts. You enter an amount of not less than your "deemed" payment calculation in your payroll software as actual gross pay in Month 12 and file the FPS accordingly. The company does not have to actually give the director the resulting net pay - instead, it can just credit it to his loan account.

It makes absolutely no difference if you calculate your deemed payment after deducting 12 x £671 and add it to the £671 being paid in Month 12 or calculate the higher deemed payment after deducting 11 x £671 and pay it instead of £671 in Month 12.

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By Archie-Bald
29th Mar 2017 18:25

Euan as always you provide the clear answer that HMRC and .gov (and even my payroll software provider) can not.

Thank you for the response it is really appreciated, have a lovely evening.

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