I am setting up a new employee in payroll who has been receiving benefits from April until October. I have a P45 for her so have entered her tax code of 810L but what I am unsure of is do I also tick the week 1 box as this is the first month she has worked or do I not tick the box?
You don't tick the Week 1 but you do need to enter the tax paid to date figure so that the program can calculate the cumulative figures for tax due. NI has no bearing on tax code.
thanks for your reply. I now also have another client that has passed their payroll to me, there is only one employee who has been on maternity pay and received her last maternity pay in october and is paid monthly. she use to calculate her maternity pay on the hmrc website so all she has given me is a print out of the monthly payments that were made to her. i am now setting her up on my payroll so again do i assume that i do not tick box week1/month 1 and enter the cummulative figures of what she has been paid to date?
i did try this but it did not deduct any tax for november, is this correct? im only recently getting to grips with the payroll and coming across some things i am unsure of. another payroll i set up i had the P11 for each employee and on there it gave the tax code for example 810l and an x in week1/moth1, therefore what is the difference then why would this one have x in box? can someone clarify as to when week1/month 1 is used as with the few payroll clients i have have taken over the existing payroll
sorry i got this wrong her p45 from the benefits office has tax code 810l and the week1/month1 box ticked and total pay to date, therefore should i still not tick this box on the payroll software? really confused now
The benefit office made a mistake when they put previous pay and tax in on a W1 tax code. You don't need it. It is quite a common error. Just fill in the tax code from the P45 with the W1 indicator.
Any views on the maternity employee? the total maternity pay to date is 3382.66 and 101.48 compensation, are these amounts all recoverable from hmrc? does that mean that this is deducted from payments made to hmrc each month? The employee is back to normal pay this month but payslip shows no tax deducted and around £70.00 ni deducted, is this correct?
need to run payslip so want to be sure i have done this correct. Comments and help appreciated
Yes you need to set up the employee that was on maternity pay with her cumulative figures to date. Week 1/Month 1 has nothing to do with when they started, it's a special code meaning that the tax and ni is worked out on a non-cumulative basis, but will be the same every week/month. HMRC will then sort out the employee's tax position at the end of the year.
The maternity pay and ni compensation would have been reclaimed from HMRC at the time they were paid each month, so you need to just record total pay to date and total tax to date.
thank you so much for your reply. I just need to check you say the smp and compensation would have been reclaimed when they were paid each month but this company only has this one employee on payroll therefore they have not had to make payments each month to hmrc for paye and ni therefore am i right in thinking from November onwards they do not make payments to hmrc as they are in theory in credit and will this be refunded to them at year end? I have run the payroll for November which is back to her normal pay and it has only deducted ni and no tax, is this correct because she has not earnt enough this year to pay tax?
Ah right, she's the only employee so they would not have had to make any payments to HMRC. I've not come across this situation before, but I assume then that at year end they will receive a payment from HMRC for the total of maternity pay and ni compensation. I would say her November pay is correct as she won't have earned enough yet to pay tax.
You could always telephone HMRC to confirm the refund situation, they are sometimes quite helpful
Any views on the maternity employee? the total maternity pay to date is 3382.66 and 101.48 compensation, are these amounts all recoverable from hmrc? does that mean that this is deducted from payments made to hmrc each month? The employee is back to normal pay this month but payslip shows no tax deducted and around £70.00 ni deducted, is this correct?
need to run payslip so want to be sure i have done this correct. Comments and help appreciated
Hi Keely,
If they'd had you in place beforehand, the firm could have had funding from HMRC to pay the SMP. As Pauline says, tell the Revenue what the forecast of NI & Tax liabilities will be or you can try the online funding form:-
Due to RTI next year, if you haven't any software in place, I would seriously think about investing a hundred quid or so and you'll be in their good-books with three grand coming back, so this is an opportune time to do it.
Yeah, I have a client with one employee who went on maternity leave in January and they got over £5000 payment in advance and we are still making nil returns monthly. Please note Keely if you have a PAYE scheme and there is nothing due you still have to make a nil return there's a web page on HMRC to do it all you need to enter is the reference No and do the drop down box for the period.
Here's the link http://www.hmrc.gov.uk/tools/payinghmrc/no-monthly-payment.htm
