Member Since: 27th Jul 2012
14th Jan 2021
Under the employee's contract, has 'entitlement' to the payment arisen for PAYE purposes? If not, then the employee could waive or salary sacrifice the payment.
If yes, then one possibility is for the employee to donate the amount under payroll charitable giving which would give rise to tax relief under net pay arrangement albeit class 1 NICs primary and secondary liability arises.
13th Aug 2020
The method (cash or plastic) by which the employee purchases the items for the business is immaterial.
I have sympathy for anyone incurring expenditure for their employer and then having to wait for reimbursement.
I suggest you simply 'accept' the situation, or provide an employer credit card or advance/loan money to the employee against their future expenses. Of course, they need to submit expenses claims with receipts (for VAT, amongst other things).
25th Apr 2019
In the event the contract of employment or the loan agreement specifies recovery from earnings, and also that any outstanding balance is recoverable on termination of employment it would be 'ok' to deduct as much as possible from 'final pay'. This would be the case even if the employee were to object on the ground s/he was left with little or nil net pay.
You do need to look closely however at the T&Cs.
For example, if there is no right to recover in full (or in part) from final pay doing so would leave the employer open to a claim of unlawful deduction (and/or breach of contract). A successful claim of unlawful deduction would mean the employer returning the deducted amount and not being able to pursue recovery via a court.
If you cannot recover fully or at all from final pay do the loan terms specify how or at all whether the employee is to repay the balance? If not, I wonder whether it was a 'loan' at all...but let's not go there.
If the T&Cs permit deduction of the balance in full from final pay, what is meant by the expression 'final pay'? What about any bonus or commission entitlement which might arise weeks/months after date of termination?
Oh, and you may want to consider whether placing the employee in financial difficulty is 'worthwhile' particularly if s/he might retain connections with the employer.
23rd Apr 2019
It's unclear from your post whether the pay for the month includes contractual sick pay (CSP). If so, the CSP is likely to be based on the lower salary (i.e. post salary sacrifice reduction).
If only SSP is being paid, there can be no reduction for sal sac. (Do not confuse matters by referring to sal sac as a 'deduction'.) In essence, SSP is statutory entitlement and not contractual pay.
As regards offsetting of SSP and CSP...even if the CSP reflects the lower salary, the SSP is offset against the residue.
As regards whether the employer pension contrib is payable you need to refer to the employee's contractual terms and conditions of employment - including what it says about sal sac - and whether SSP is pensionable.
7th Feb 2019
What is your client seeking to achieve by quoting an annual salary? If it's to complete some earnings related form does it matter what is entered? If it's to simplify payment processes (e.g. move to monthly payment) care needs to be given to whether imposing this change is desirable and agreeable to the worker. Moreover, paying an annual salary is fundamentally different to paying only for time worked, as the implication is that salary is payable in full irrespective of time worked (except where T&Cs specifically provide for deductions for prescribed absences).
11th Dec 2017
Did the 'estate' employ the pair?
4th Apr 2017
This guidance might help:
An aspect of the pay date is that HMRC may well use it to determine the amount of tax/NICs falling due for the tax month/quarter - ie period 12 for 2016/17 rather than period 1 in 2017/18.
Maybe contact HMTC helpline to obtain their advice?
17th Dec 2014
It's Panto time of year - Oh yes it is
We've been round this loop more times than I care to remember. :)
I refer you to the last para in my previous post.
16th Dec 2014
It's an ad hoc payment
My understanding is that the easement may apply "where occasional ad hoc payments are made to individual employees and the payroll would not normally be run at that time. In this case there is no need to send a separate FPS. Instead such payments are to be reported in the next regular payroll run/FPS. The easement does not cover situations where it is established practice for earnings (such as overtime) to be paid outside of the regular payroll cycle. A ‘payment on account’ of earnings is not considered to be an ad hoc payment where it is an established practice for some earnings to be paid outside the normal payroll cycle. Such payments must be reported on or before the time they are made."
It is however unclear in the case described by Chicka what the contractual provisions might say about payments arising from late timesheets.
There is also in my opinion a risk that a wide raft of legislation (tax, social security, pension and employment law) that features payment of wages / salary are being overlooked simply because it is convenient to carry forward the adjustment / underpayment to the next pay period/run.
15th Dec 2014
It's an ad hoc payment
That's not quite how Chicka has described it.