I'm using HMRC's Basic PAYE Tools for a very small group working term time only (39 weeks). Pay and Holiday Pay is calculated for the year and then split into 12 monthly payments so that the employees get a balanced pay throughout the year (including the xmas, easter and 6 week holiday periods). The group is closing down at the end of term so the cessation date is 31 July, but their July pay will be the normal payment for July, plus what they have already earned for August and some redundancy pay. Can I calculate July and August pay separately as they wouldn't normally pay tax and NI on their earnings but if I put the two payments together it will be over the limit? Also, do I have to enter the redundancy pay on the Basic Tools (its way under the £30,000 threshold)?
Welcome to the forum Lisa.
We always ask newbies to do a little intro about themselves, bookkeeper or Accountant, where based, which prof body you are with, level of study or QE, how long you've been in this crazy business, that sort of thing. Just a few lines, helps everyone to get to know you a little and also to help pitch answers.
Also, we ask peeps to add their first name to their signature bar so that it pops up on all posts. Go to edit profile, easy peasy and only takes a sec.
Just some clarification - you mention cessation date is July, but just wanted to check - have you put HMRC on notice that the payroll scheme is ceasing then? As you mention they will have 'earned' something for August! Confused. Or are you saying they get paid eg two weeks in arrears and two in advance?
You will need to include the redundancy pay in the payroll, but it will need adjusting so no tax/NI is paid up to the threshold and so that it doesnt appear on their P45s. Not sure how in this software as I dont use it - have you got access to the Basic Tools guide as it might say in there (sorry not got time to look!). Does Basic Tools even do P45s or do you need to do them manually? If so - this at least makes this part of the process easier - but dont forget to order then from HMRC in time.
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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
Just some clarification - you mention cessation date is July, but just wanted to check - have you put HMRC on notice that the payroll scheme is ceasing then? As you mention they will have 'earned' something for August! Confused. Or are you saying they get paid eg two weeks in arrears and two in advance?
Hi Joanne
They have split the 39 weeks into 12 monthly payments, so that August payment reflects the remainder of monies due for hours worked between September and July. At least that's the way I read it. I'm assuming there's nothing to stop the op doing a payroll run for July then an August run on 6th August? They could then close the scheme on 6th August.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Hi John I guessed as much but wanted to draw Lisa out on the cessation date, to be sure that nothing at HMRC would be switched off that quickly - although they arent known for being that organised are they!
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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
John was correct about the August pay would have been the hours already worked. I haven't informed HMRC of the cessation date yet. There is an accountant dealing with the books for this group and he has said that the group will close on 31 July.
-- Edited by LisaG on Tuesday 28th of June 2016 06:27:47 PM
Hi Lisa I can see you have completed an intro via your profile page.
I love visiting the New Forest - whereabouts are you based? We do have one or two peeps in your area. We also have quite a few who use Moneysoft so hopefully can help if you get stuck on there, or you may be more of a guru than those on here so might be able to help us out.
Given you have mentioned the schools, Ive also edited this post of mine to reflect that the 'group' you mention is not a small group of companies. Not sure what the legal position is of the 'group' you mention and the need to close it on the 31st July? Probably would be worth speaking to the Accountant to clarify matters as it could mean that all the payroll and indeed payments will need to be done by 31st July, so he might delay in shutting the rest down until the payroll has been done in August (which can be as early as 6th as John has suggested). Be interested to know what the Accountant says.
-- Edited by Cheshire on Tuesday 28th of June 2016 07:02:01 PM
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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
Sorry, I put the intro on my profile. I am an administrator/book-keeper and payroll clerk for three pre-schools in the New Forest area who are run by voluntary committees under a charity status. I have worked for them for the last ten years and mostly picked up the knowledge as I've gone along. I do hold a City & Guilds Level 1 & 2 certificate in book-keeping. The pre-school I'm discussing here - I just do their payroll and an accountant does the books and he wants all payroll and payments complete by end of July.
Hi Lisa
I edited my post as I then saw your profile! Not sure now if you have seen my post as you were probably typing yours as I was doing mine! Happens a lot on here! I mentioned chatting to the Accountant as he might not be appreciating how you are spreading the payroll and the impact it will have on final tax bills if you do it all in July. Worth sounding him out - it might just be what he 'wants' rather than what is in their best interests, but persuading to wait a few days shouldnt have an impact on what he is trying to do, so worth the call.
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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
Thanks Joanne I will speak to the accountant. I'm based near Hythe. I'm actually new to Moneysoft but am finding it much better to use than Iris and much cheaper Thanks for your help.
My brother had his boat just across the water from you in Hamble, so I know that area fairly well. Love all that area especially round Beaulieu.
Oh gosh, yes Moneysoft much much cheaper than Iris. The only downside as I see it is that the support isnt open at weekends so you then have to rely on people on here - which is usually not a problem, unless of course everyone is mega busy and doesnt look at their posts until Monday morning. But I dont remember a question that remained unanswered for long.
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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
Thanks for your help.
