Client instructed payroll bureau not to pay salary last year, and this will cost him £800 odd in tax for various reasons. Bureau reported nil pay at 5/4/17. I think it would be worth me reopening the payroll and processing £8k for 2016/17. (I became payroll agent this year anyway).
Would I have to use HMRC tools to do this and what would be the penalties? Looking at the penalties am I right in thinking:
Failure to make returns on time? £0 because first offence? Or is it £100? Are there any other penalties I've missed?
Replies (3)
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You can't rewrite the past. Salary was not paid so you can't back date it.
You can recommend a lump sum bonus now which is 2017/18 income for director with max ct relief in whichever company year is the latest.
Marion Hayes answer may be correct. However, are you rewriting history or just processing a salary that was never recorded?
You may have to use Basic PAYE tools to correct an error. However, if the payroll was never ran for the previous year / part of a year then that is not an error being corrected. Therefore running that payroll, as an Earlier Year Update (EYU), on your own payroll software should be easier.