HMRC has amended section 1.14 in the 2017 to 2018 CWG2 and the 2018 to 2019 CWG2, which covers how to deal with Pay As You Earn (PAYE) and National Insurance contributions (NICs) in less common situations.
Section 1.14 deals with Standard payments made when, or after, an employee leaves. Standard payments apply to such items as: the final payment of salary or wages; holiday pay; week-in-hand payments; and bonuses. It does not apply to one-off payments such as retirement or redundancy.
The guidance states: ‘PAYE and NICs are due in the normal way on any standard payments you make to employees when they leave or after they have left. The payments should be recorded as normal on the Full Payment Submission (FPS). Make sure the revised year to date figures include the payment.
‘If the payment is made in a later tax year to the one in which the employee left, record the payments accordingly on your FPS. The year to date figures on the FPS should reflect only the additional payment.’
The guidance goes on to offer further information on how these payments should be calculated.
