An employee was paid monthly up to end December for whole of 2013/2014 tax year - she has never paid any NI (pay to date £3776.99). Employer has changed some staff to weekly pay as of today. I use 12 Pay software - so added new payroll/moved staff and did they payroll yesterday.
One lady did 41 hours (some of which were done in December after a cut off date (hours vary massively but has never been more than 90 in a month, this year) so for her new weekly the pay was £258 pre deductions.
She has had £13.16 deducted for NI and has queried it as she has never paid it before and is likely to be under the threshold by the end of the year.
Wondering if I should have done something within the payroll to avoid it, or if there is anything I can do now?
Help please and thanks!
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
I would imagine the software is seeing your employee as being paid 41hrs per week. When you start putting through the actual weekly hours, say 22 hrs per week that ni should by rights be rebated. I don't use 12 pay but in sage this is usually the case.
Hi Joanne,
you are right that NI is not cumulative, so if she worked 41 hours in a week then she will have to suffer NI, unfortunately it seems that some of these hours were done in the previous month. Payroll is accounted for on a receivables basis so I fear she will have to suffer (if not in silence) or maybe her boss will give her £13 from his pocket to placate her!
Hi Rob
I suggested he cough up, as he rushed this through with no thought!! Ive left him with a couple of options. Wish these guys would talk to me more before they introduce new stuff, but hey ho we do what we can.
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
...only if it goes through the payroll....This is basically something the employer has messed up on and the employee is taking the hit, so the suggestion is the employer makes this up out of his/her own pocket...Cue all the abuse from the purists!!
Yup I would just hand over £13. We have an employee who has all his holidays in one go and wants paying beforehand, I have to use the pay in advance function. He just happened to do it one year before the end of year so it wouldn't allow pay in advance, now I know why he paid over the odds in insurance, I always thought it was something that sorted itself out.
Whats the reasoning behind it not being cumulative, it appears unfair?
Steve, now you're being silly asking for 'reasoning' and 'fairness', next you'll want to know why in this age of 'tax simplification' why we have LEL, UEL, UAP, Primary and Secondary Thresholds, Classes 1 , 1A, 2, 3 and 4 NI and why isn't the threshold for NI the same as personal allowance. I suggest you write to John Whiting.... Oh how lovely it must be in your world of logic!!
Steve, now you're being silly asking for 'reasoning' and 'fairness', next you'll want to know why in this age of 'tax simplification' why we have LEL, UEL, UAP, Primary and Secondary Thresholds, Classes 1 , 1A, 2, 3 and 4 NI and why isn't the threshold for NI the same as personal allowance. I suggest you write to John Whiting.... Oh how lovely it must be in your world of logic!!
Now you see when I'm chancellor I shall doing what Tom Clancy suggested in one of his novels and simplifying tax to the point that people won't require accountants
