I'm trying to work out the correct accounting entries for my client who is an owner director and in the past year took maternity leave and claimed SMP.
They are the only person paid a salary which is below tax/NI thresholds, so SMP could not be offset against any payment due. HMRC sent a cheque reimbursement recently for the portiont that related to 2018/19 and will send the remainder at the end of this tax tear.
How would you record the payroll entries for the recoverable SMP and (3%) NI compensation? For example,
Statutory Maternity Pay £645.69
National Insurance compensation £19.38
I guess this would be a lot more straight forward if there was other employees being paid since the SMP would just be offset against the PAYE.