Share this content
7

Universal tax credits

Will issuing a P45 and immediately re-employing them affect their tax credits.

Didn't find your answer?

I have a client that has an employee on fortnightly pay and is moving them to monthly pay. Sage one cannot do this unless I mark the person as a leaver and then re-emply them again as a monthly paid employee. The person concerned is on universal tax credits and my concern is that if I issue a P45 to HMRC, through RTI, they will think his circumstances have changed and stop his payments. It seems to be the case that they will use any excuse to put a spanner in the works!

So, my question is, is this scenario likely to unfold or will this have no impact on his payments?  

Replies (7)

Please login or register to join the discussion.

By Moonbeam
31st Aug 2018 13:41

Sage One is hardly a professional product to rely on for payroll purposes. Why not move to eg Brightpay, where no P45 required just to switch payment frequency.

Thanks (0)
Replying to Moonbeam:
wolfy
By rob winder
31st Aug 2018 13:50

There is always one waiting with some smug pointless comment. Regardless of the pros and cons of Sage One your response isn't particularly useful.

Thanks (2)
Replying to Moonbeam:
avatar
By atleastisoundknowledgable...
03rd Sep 2018 00:02

To be fair, you’d need to do the same with Moneysoft, and you can’t argue that’s not pro software.

Thanks (0)
avatar
By Pygmy
31st Aug 2018 14:10

On the basis of how HMRC treat mid-year changes in Works Number for the same individual I think the chances of HMRC reading a P45 as you might wish are either slim or nil.

Would you consider Moonbeam's suggestion if the answers to your questions were Yes and No?

Thanks (0)
By Democratus
03rd Sep 2018 10:25

Then- is it important that they move monthly now?

Thanks (0)
avatar
By PBH64
03rd Sep 2018 11:57

If by universal tax credits you mean Universal Credit then the answer is probably not. But you'll need to do it properly. The leaving date in the RTI will close an employment in HMRC and the starting date on the first monthly payment will open a new one. This will be fed to DWP. The DWP system looks at the payments. If the YTD in the fortnightly job is £x and the first payment monthly is £y then the ytd in the monthly job needs to £y both HMRC and DWP systems will work properly. If for any reason the ytd in the monthly is shown as £x+y there will be potentially problems with both departments as the taxable pay submitted will show £2x+y.

Thanks (1)
Replying to PBH64:
wolfy
By rob winder
03rd Sep 2018 12:43

Thanks for your clear and succinct reply.

Thanks (0)
Share this content