Payroll balls up - Urgent help required.

dantray Registered Posts: 72 💫 🐯 💫

I prepare payroll for a client, a director of limited company who earns £6000 per annum through PAYE. In March I was told to issue a bonus payment of £475 in order to utilise the maximum personal allowance and have subsequently forgotten - yes, I have kicked myself.

As the P35 has been submitted how do I go about amending the records to account for the additional £475 payment and what are the implications of amending the P14 & P35?

Thanks in advance.



  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 🎆 🐘 🎆
    Personally, £5715 is more tax efficient than £6475 as Employers and employees NI will be payable above 5715, cancelling out any saving.

    Furthermore if the director is in receipt of any interest income, then assuming his only other income is interest and dividends and he is a basic rate taxpayer, he will be due a tax refund. Even if he's a HR taxpayer, better to have a bit extra on his PA available.

    So: I don't think it's necessary or advisable to amend the P35.

    I know that's not what you asked (if you absolutely have to, I'd write to the tax office and request an amendment)!
  • dantray
    dantray Registered Posts: 72 💫 🐯 💫
    Hi Monsoon,

    Thanks for the reply - I did raise that issue when I was instructed to increase the salary (based on advice from senior partner) but was told to increase it nevertheless.

    It's annoyed me more than anything else. I hate it when things like this happen.
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 🎆 🐘 🎆
    Yeah me too, I hate making silly mistakes.

    I'm pretty sure you can just write and amend the return same as any other. BUT remember there are now NI contributions due so these will be paid late.

    There shouldn't be any penalties as the P35 was submitted on time.
  • Rozzi Rainbow
    Rozzi Rainbow Registered Posts: 465
    Dan - I presume you have the relevant codes to file online? You can amend the P35 online (I couldn't do it through Sage though, had to be directly on the HMRC website) but it's a bit tricky as it's not the amended amounts you file but the increase or decrease! It might be easier to just write in as Monsoon suggests.
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